High number of commercial insurance claims expected from U.K. stormsReprints
The storms Eva and Desmond that hit the United Kingdom in December, causing widespread flooding in many northern areas, likely will result in insured losses of between £900 million and £1.2 billion ($1.33 billion and $1.78 billion), with a significant percentage coming from commercial insurance claims, PricewaterhouseCoopers L.L.P. said Wednesday.
PwC said those losses did not include the possible impact of Storm Frank, which hit the United Kingdom Tuesday.
PwC previously had estimated insured losses from storms Eva and Desmond at up to £1 billion ($1.48 billion).
The storms caused widespread flooding in northern England and parts of Scotland.
Mohammad Khan, general insurance leader at PwC in London, said Wednesday that insured commercial losses from the recent storms would make up a higher proportion of the total loss than in previous flood events in the United Kingdom.
“The storms and resultant floods in December 2015 have been unusual compared to prior storms in the United Kingdom in that there have been a significantly greater proportion of commercial insurance claims compared to personal insurance claims,” he said in a statement.
“Traditionally, commercial lines insurance claims have made up approximately 10% to 30% of the total insured loss claim. Based on what PwC has observed in the market, commercial lines insurance claims will make up about 50% of the total insurance claims” resulting from storms Eva and Desmond, he said.
He said that the proportion of commercial lines claims would be higher in part because more cities and towns have been hit by the recent bad weather compared with prior U.K. storm events.
Business interruption losses likely will make up a greater proportion of the insurance bill than in previous storms, he noted.
Total economic losses from storms Eva and Desmond will likely be between £1.6 billion and £2.3 billion ($2.37 billion and $3.41 billion), PwC said.