Floods 'may result in car insurance hikes'

Posted :22-08-2007

Car insurance premiums will rise as a result of the cost to insurers following the widespread UK floods this summer, according to a leading actuarial consultancy.

EMB, Europe's largest general insurance actuary, states that insurance companies currently face around £3 billion in claims from consumers affected by the floods, contributing to a ten per cent rise over the next year.

Senior consultant at EMB Paul Moorshead commented that property insurance profits are often used by providers to supplement car insurance portfolios. However, due to the large number of claims being made by consumers following the floods, these profits are expected to be reduced.

Norwich Union and Royal Sun Alliance stated that they did not believe that any significant increases in car insurance premiums would take place due to the impact of floods.

The Environment Agency recently reported that Britain faces the prospect of more floods in the coming months due to saturated soil being unable to absorb more rainwater.


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