Storms likely to hit insurance premiums

Thursday 20 February 2014

Property insurance premiums are likely to rise if Jersey homes and businesses continue to be affected by adverse weather in the future – according to BWCI.

The UK insurance industry is facing costs of more than £426 million because of the damage caused by severe weather over Christmas and the New Year. BWCI’s actuaries help insurers to assess insurance risks and manage the financial exposures arising. They believe insurance firms will absorb Islanders’ short-term claims made as a result of the wettest January for centuries. But they may have to reappraise the risks of bad weather.

BWCI’s Head of Insurance Services Ian Morris said: “Continued adverse weather may cause insurers to review their view of the frequency of adverse weather events. They may review their view of the risks affecting the Channel Islands, or particular locations within the Channel Islands.

 “I believe that fundamental changes in premium rates in the Channel Islands are more likely to arise from wider considerations such as whether an increase in global temperatures is going to affect future risks, rather than the adverse weather we have at the moment.”

Mr Morris said that prior to the bad weather, claims at the end of 2013 were actually down nearly a quarter compared to the same nine months in 2012. He said: “The costs so far are not as high as in 2007 where flooding in Gloucestershire caused claims of up to £2 billion. We have yet to see how badly affected the UK is on this occasion.”