A new report shows that UK carriers are facing some unpleasant numbers for the year just past. UK property insurance claims for 2024 are forecast to total £5.5 billion, marking the highest payouts since the 2007 summer floods.
Although president-elect Donald Trump famously posted on Twitter/X that climate change was a Chinese hoax: “the concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive,” he said, weather-related claims (floods, storms, freeze, and subsidence) are expected to amount to £1.2 billion, approximately twice the average annual payouts from 2017 to 2020. These weather-related claims will represent 22% of the total insurance payouts for 2024. A recent Deloitte survey reveals that 90% of home insurance professionals see climate change as a significant business risk.
According to Deloitte's analysis, property insurance payouts for 2024 are on track to hit their highest point in 17 years. The anticipated total reflects the impact of severe weather events and broader property damage trends.
Read more: 2024 losses driven by flooding
Data from Deloitte suggests that claims for the final quarter of 2024 (October to December) could reach £1.4 billion. Combined with previously released industry data, this would bring the annual total to £5.5 billion—the highest figure since 2007, when flooding caused by heavy rainfall led to insured losses of around £3 billion.
Weather-related claims alone are projected to reach £1.2 billion for 2024, doubling the average annual payouts seen between 2017 and 2020. These claims account for over a fifth of the total property insurance payouts anticipated for the year.
A growing share of property insurance claims is being driven by extreme weather, highlighting the increasing challenges posed by climate change. In Deloitte's November 2024 survey, 90% of home insurance professionals acknowledged climate change as a risk to their business—a notable increase from 82% in 2023. Among respondents, half cited flooding as a major concern.
James Rakow, an insurance partner at Deloitte, commented: “Our forecasts indicate that 2024 will rank as the costliest year for property insurers since the significant flooding events of 2007. With storms and flooding becoming more frequent across the UK and globally, these trends are unlikely to surprise insurers.
“As we wrap up 2024, the final figures will provide insights into the financial impacts of weather-related events on insurers' operations and how these may affect premiums and strategic plans moving forward.
“The start of 2025 has already seen substantial weather-related claims, largely due to flooding. Insurers are likely grappling with volumes of adverse weather claims in just the first two weeks that would typically occur over an entire month. This underlines the need for the industry to adapt to the escalating risks linked to climate change. Insurers face complex decisions as they strive to address customer expectations, regulatory requirements, market dynamics, and shareholder interests.”
The £5.5 billion payout estimate for 2024 is derived from data provided by the Association of British Insurers, which Deloitte has analysed and published with permission. Figures for the final quarter of 2024 are based on proprietary analysis and additional data sources.
Insights into UK home insurers' perspectives are based on Deloitte’s survey, conducted during its annual Home Insurance Seminar in November 2024. The survey included 165 senior representatives from 59 companies in the home insurance sector.
