Tackling uninsured drivers show some success

Over recent years the insurance industry has been battling to try and combat the financial damage that has been caused by uninsured drivers, and many insurance giants and the insurance industry as a whole have been fighting to crack down on uninsured drivers. Read more

Tags: Tackling, car insurance, uninsured drivers, Bureau, time, drink driving, accidents, insurers

Insurers advised on risk models

With Hurricane Dean having caused havoc across the Caribbean in the past week, along with forest fires caused by the Mediterranean heatwave – not to mention the two disastrous floods in southern England last month and in June – this summer has been marked by an unusually high amount of natural disasters.

Insurance companies have been left to count the costs, with the two UK floods alone estimated to set them back £2.5 billion, according to figures from the Association of British Insurers (ABI).

Today, investments company F&C warned insurers that, with the seemingly higher incidences of natural disasters, they will need to adjust their risk models accordingly.

Associate director in the firm’s governance and sustainable investment team Vicki Bakhshi said: “The good news is that the sector is starting to wake up, and some risk models are now beginning to be amended. But the question is: which will change faster, the way the insurance sector operates or the weather?

“Despite the change in climate conditions, the risk models used by insurers are almost entirely based on historical patterns, not on climate science, and they do not take into account this upward shift in the risks,” she added.

“This means insurers might be underpricing risk. And some may also be underestimating the amount of capital they need to survive the kind of mega-catastrophes that are more likely to occur as a result of climate change.”

F&C also announced today that it has been conducting research into how insurance companies are responding to climate change, and will be publishing a report on it soon.

Tags: higher incidences, Financial institutions, firm, report, science, uk

Insurers count costs of floods

The floods in the West Country last month, along with the Central England floods in June, have cumulatively been termed the worst in 60 years in the UK.

Now, as the waters have receded, Britain’s insurers have been counting the costs.

Aviva, owner of Norwich Union and the biggest insurance company in the country, announced last week that it faced £340 million-worth of claims, split evenly between the two deluges.

Royal Bank of Scotland, the UK’s second-largest home insurer said that the floods would cost them around £250 million.

Insurance premiums for extreme weather conditions are likely to go up nationwide, with those in areas which have previously flooded likely to be most severely affected.

Last month, the Association of British Insurers (ABI) was forced to revise its estimates upwards for the recent floods to a grand total of £2.5 billion.

According to Risk Management Solutions, the damage caused by the floods was much smaller than that wreaked by those in 1947, which would cost “between £4.5 billion and £6 billion” if repeated today.

Tags: West Country, bank of scotland, damage, insurers, economics, Central England, home insurance

Pets in floods covered by home insurance

Household pets left without a home temporarily in the recent floods could well have their stays in alternative accommodation covered by household insurance.

The advice was given by insurance provider Norwich Union today.

A spokesperson for the insurer said that “we will pay, as part of the alternative accommodation, under a claim for flood, for reasonable accommodation expenses for you and/or your pet… they can put them in the kennel or someplace and their building insurance will pay for that.”

However, he added that for any injuries sustained by pets to be covered, separate animal insurance would probably have had to have been previously taken out: “If your pet is injured, that is what pet insurance is there for.”

The insurance industry will be hit hard by the recent floods. The Association of British Insurers (ABI) now estimates that last month’s storm damage will lead to £2 billion in claims.

The cost of the most recent floods is also currently pegged by the association at hundreds of millions of pounds, and rising.

Tags: animal, taken out, cost, reasonable accommodation expenses, insurers, reasonable accommodation, kennel