THE impact of the storms and flooding which brought chaos to much of southern England will be laid bare this week with two of the insurance industry’s biggest names expected to reveal substantial hits.
Experts estimate that the extreme weather may have cost Britain’s insurers as much as £1 billion. More Than parent company RSA and Direct Line Group have already flagged hefty bills.
The weather claims come at a tough time for Aviva, which is due to report results on Thursday, as it battles to turn its fortunes around.
It has revealed a 14 per cent slide in UK new business in the third quarter, due to reductions in the general insurance business across the market and increased competition on pensions.
Chief executive Mark Wilson hailed a 14 per cent increase in new business in the first nine months of the year for the overall group, citing growth in Asia, Poland and Turkey. But he stressed this growth was set to moderate in the fourth quarter due to strong comparatives from a year earlier, admitting there was still “much to do” in the recovery plan.
Analysts at Panmure Gordon are expecting this week’s results to show operating profits dipping 2 per cent to just under £2bn for the year, hit by weather claims in the UK and Canada, which also suffered flood damage in 2013.
The City is pencilling in a 13 per cent rise in profits at sector peer Legal & General, which reports on Wednesday, to £1.2bn thanks to a buoyant year for new business, expected to have risen by nearly a fifth.
Faced with a multi-million pound bill for the recent floods, the group has been a vocal critic of the lack of government spending on flood defences and a policy of building in vulnerable areas.
Direct Line said it was expecting a hit of up to £110 million so far from the storms and floods since the start of the year.