Payouts relating to property damage in 2024 are expected hit their highest level in 17 years, according to UK insurance sector analysis by Deloitte.

Deloitte analysis shows that claims for Q4 2024 could total £1.4bn, which when coupled with previously published industry data, will give a year end figure of £5.5bn. This is the highest level since 2007, when large swathes of the UK were hit by flooding during a summer of torrential rain, and insured losses for flood claims were estimated at £3bn.

For claims specifically related to weather (including floods, storms, freeze, and subsidence) Deloitte estimates the full year payout in 2024 is likely to reach £1.2bn. This is approximately double the annual levels seen between 2017 and 2020 and represents 22% of the overall £5.5bn that Deloitte expects UK property insurers will pay out in 2024.

James Rakow, insurance partner at Deloitte, said: “Our analysis and expectations show that 2024 will be the most expensive year for property insurers since the summer floods of 2007. With extreme weather events such as storms and flooding becoming more commonplace in the UK and beyond, insurers likely won’t be surprised by this.

“As the final claims for 2024 are counted, insurers will be assessing the impact of weather events during the final quarter and working out what the potential impact on their trading plans and consumers’ premiums will be.”

He added that the outlook for the year ahead is also concerning for insurers: “Weather wise, 2025 has not got off to a great start. We’re less than two weeks into the year, and due in large part to flooding, insurers have already likely seen the levels of adverse weather claims that they would ordinarily expect for the whole month. Learnings from 2024 and early 2025 will show that insurers have tough choices to make, with weather events associated with climate change a real and present danger. Insurance executives will be working hard to balance the needs and expectations of customers, regulators, markets and shareholders.”

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