Belfast Telegraph

Friday 18 April 2014

UK's stormy summer weather costs insurer £50m

More Than insurer RSA has revealed a £50m hit after the UK's dire summer weather resulted in more than 6,500 claims since June alone.

The wettest June on record landed the group with a £40m bill, while it expects to suffer another £10m hit so far in July as Britain continues to be battered by rain.

It said the East Midlands, North East and North West were the worst-affected areas, suffering storm damage, flooding and even hail stones the size of golf balls.

RSA, which operates in 140 countries, also revealed a £35m impact from claims relating to the two earthquakes in Italy in May.

RSA said more than half its weather-related UK claims have already been settled.

The group's combined operating ratio, which shows claims and expenses as a percentage of premium income - where a figure below 100% means a profit is being made - has been affected by the recent claim losses.

RSA said it is now expected to be "better than" 96%, against 95% previously.

While the UK has seen record rainfall since April, RSA said this year's weather claims fall far short of the company's £120m bill from the widespread flood damage seen in 2007.

But RSA shares fell by about 3% after news of the bill.

The group recently revealed it was also suffering from a "dysfunctional" motor insurance market after reporting a 17% slump in the division's premiums during the first quarter of 2012.