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Year-to-date property claims payouts hit £4.1 billion

19/11/2024

Insurers paid out £1.3 billion in claims during the third quarter of this year to help homeowners and businesses cope with unexpected and unwanted events like fire and flooding,1 according to the latest data from the Association of British Insurers (ABI).2  
 
This follows a costly second quarter for insurers with claims payouts of £1.4 billion,3 bringing the year-to-date total to £4.1billion – the largest amount paid out in the first nine months of any year on record.  

Claims for the first three quarters of the year were also more than £500 million (15%) higher compared to the same period in 2023. This increase comes as adverse weather continues to play a significant role in the amount insurers pay out in home insurance claims.     

The latest claims data from the ABI reveals:  

  • Total claims in the third quarter of this year were £200 million more compared to the same quarter last year.  
  • The average payout per home insurance claim rose 13% on Q2 2024 to £6,002 – a record high. It is also 33% (£1,506) higher compared to the same period in 2023.  
  • Claims for damage to homes from storms, heavy rain and frozen pipes reached £136 million in the third quarter of this year. This is the sixth consecutive quarter that weather-related claims have been above £100 million. The figure is also 6% higher than the £128 million paid out in Q3 2023.  
  • Claims for weather damage to businesses remained high at £90 million – an increase of 4.5% on the previous quarter, and up 28% on the same quarter last year. 
  • Subsidence payouts for home insurance claims were also up at £66 million – rising 11% on the £59 million paid in Q2 2024, and 61% on Q3 2023.  


The impact of high claims is reflected in the price of premiums, as the average price of combined building and contents home insurance went up by 3% in the third quarter of the year.  

The latest premium data from the ABI reveals:  

  • The average price of a household combined buildings and contents policy in Q3 2024 was £407 – £11 (3%) higher than the previous quarter and £56 (16%) higher than the same period last year.  
  • The average buildings only policy was £329, an increase of £9 (3%) on the previous quarter, and up £57 (21%) on Q3 2023. 
  • For contents-only cover, the average price paid was £138 – stable from Q2 2024 but £11 (9%) higher than Q3 2023.  


When adjusting for inflation, the average premium paid is comparable with prices paid in Q3 2017.  Meanwhile, the equivalent average claim paid is 72% more expensive than Q3 2017.4 Inflation-adjusted data shows what historic costs would have been if they faced the same inflationary pressures we're experiencing today, uncovering the real growth or decline.  
 
EY figures show that in 2023, for every £1 property insurers received in home insurance premium, they paid out £1.18 in claims.5 This follows on from another loss-making year in 2022, when insurers paid out £1.22 in claims for every £1 received in premiums. EY also expects further losses in 2024 – making it the fifth year in a row that property insurers will pay out more in claims than they receive in premiums. 

Louise Clark, Policy Adviser at the ABI said: 

“Insurers continue to be at the forefront of climate change, supporting communities impacted by extreme weather to recover as quickly as possible. We know premiums are putting pressure on household budgets and, as an industry we’re determined to play our part in tackling the cost pressures behind them.  

“However, the industry cannot do this alone. The government must take action too, and more investment in flood defence and maintenance is urgently needed. We also need to see swift action on surface water flooding, and an immediate end to building on land that is at a high risk of flooding. Flood prevention and resilience measures must be considered in all planning decisions and building standards – to make sure all new buildings are climate resilient.”  
 
Notes for Editors:   

Footnotes  

  1. Claims for commercial and domestic policies.  
  2. The ABI’s Property Insurance Premium Tracker is the most comprehensive in the UK, analysing nearly 28 million policies sold a year. It’s also the only collection that is based on the price customers pay for their cover rather than what they are quoted (which typically delivers higher averages). More on this in our blog. 
  3. This is a quarterly high since the ABI started collecting the data in 2017.
  4. The earliest available comparison for inflation adjusted ABI data is 2017.  
  5. https://www.ey.com/en_uk/newsroom/2024/10/2023-is-another-loss-making-year-for-uk-home-insurers  

 

Last updated 19/11/2024