Admit it, home improvement shows are a delight to watch – and who wouldn’t like the idea of coming home to a refurbished abode? Well, I guess it depends on who is being asked.
For insurers in the UK, this fascination towards beautifying homes could prove costly, with a
Financial Times report citing rising home repair expenses. Addressing leak damage, for instance, is no longer a simple expenditure.
According to the report, fixing leaks is now a lot more expensive – what with precious wood floors, multiple light fittings, and ensuites. It cited EY’s UK general insurance leader Tony Sault, who noted that from 2013 the average leak claims cost had risen from £1,750 to over £2,500.
Not only does EY predict a barely profitable 2017 for home insurance providers, it also believes losses are likely next year. And the British weather is not to blame.
“The outlook for the next couple of years is looking challenging for home insurers – even if the UK isn’t hit with particularly damaging weather,” the report quoted Sault as saying.
Unlike in the motor insurance sector where we’ve seen
sustained increases in premiums, home cover is painting a different picture.
Insurer esure, for instance, recently reported first nine months’ gross written premiums of £625.8 million – a 25% increase – with the motor unit’s 30% growth making up for the home division’s 6% slump.
“We’re certainly seeing more price competition, prompted partly by price comparison sites getting more active,” added Sault. “With increasing pressure on household wallets, more people are shopping around. Insurers have been pushing rates down to compete.”
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