Severe weather events are becoming increasingly common, costing insurers millions of pounds in claims as they struggle to get to grips with this change. In response, Ageas has started utilising WeatherNet’s SurgeCast application, which will give it granular data on the precise location of policyholders. This will enable the insurer to take a more proactive approach and warn and advise customers at risk of upcoming weather events.
GlobalData’s UK Top 25 General Insurance Competitor Analytics found that Ageas was the seventh-largest household insurer in the UK in 2023. It accounted for a market share of 7% and £418.3m in gross written premiums in 2023, making it a key player in this line. As a result, its shift to a more preventative approach could be the start of a wider trend within the industry as insurers struggle with increasingly expensive weather events. Such initiatives benefit customers greatly too: the more information they have and the earlier they receive it, the more action they can take to reduce damages. Ageas will also provide consultation services, which should help reduce the impact of extreme weather events.
GlobalData’s 2023 UK Insurance Consumer Survey found that 29.8% of household claims in 2023 were caused by severe weather. 12.2% were caused by weather events excluding floods or storms while 9.2% and 8.3% were caused specifically by floods and storms respectively. This is particularly problematic for insurers as such claims tend to be extremely expensive. For example, PwC estimates that Storm Babet in October 2023 cost the industry at least £450m. 2024 has already seen two large storms between 21 and 24 January, which will also prove costly for insurers.
The increasing frequency of such events and how much they cost mean it is an urgent problem for insurers. Household insurance premiums are already rising, and the industry could face certain areas of the country being almost uninsurable due to the high level of risk, as we are already seeing in parts of Australia and the US.
Therefore, Ageas utilising WeatherNet’s SurgeCast app—thus switching the focus towards prevention and reducing the impact of such storms—is a positive move from a leading insurer. The cost-of-living crisis means consumers are already struggling with premium inflation across a range of lines, so insurers should be doing everything possible to keep claims down to retain and attract customers. Being proactive on weather-based claims is a particularly good place to start.
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