UK fire and sag claims will rise due to extreme heat, insurer says | Insurance sector

One of the UK’s largest home insurers has warned of the impact of record high temperatures on claims, saying the climate crisis is already leading to an increase in fire and sag cases this year.

LV=General Insurance (LV=GI), which was taken over by German insurer Allianz in 2019, said it was handling claims worth £1.2million after extreme heat hit the country between July 17 and 20.

Most of these cases involved fires starting in open areas or nearby moorland that spread to homeowners’ gardens, resulting in fence, garage, greenhouse and patio fires, with 8% of cases involving the loss total of a house.

The company said already dry ground and the prospect of further garden hose bans could also lead to a spike in subsidence, causing the ground to subside beneath a building and the foundation to collapse with it.

LV=GI said there was a 205% increase in subsidence cases between June and July, and extreme heat in August could lead to a similar increase in claims in 2018, when they rose by 51 % due to exceptionally hot weather.

His analysis showed that rainfall in southern and central England was already lower than in 2018, raising the possibility of houses sinking due to unstable ground.

“We’re really starting to see the effects of climate change and the impact it’s having on homes – whether it’s storm-related claims, floods, fires or cave-ins – all of which have increased in recent years. depending on the season,” said Sarah Smith, head of home underwriting at LV=GI.

She suggested that developers and city planners carefully consider where new housing is being built, to help prevent further damage.

“As a country, we are going to have to adapt and make sure that existing homes are better protected, as well as really consider the planned locations for new homes which may be in areas more prone to events such as fires that occur. declare and spread rapidly,” she added.

Meanwhile, car insurer Admiral has revealed its pre-tax profits nearly halved in the first half of the year, partly due to an increase in road accident claims from the height pandemic restrictions. Pre-tax profits fell to £251m from £482m last year.

The insurer said it was also forced to raise premiums by around 16% between March and July this year to offset rising costs for car spares and repairs.

Meanwhile, Aviva announced plans to increase payouts to shareholders after announcing a 14% rise in operating profit to £829m in the first half. The insurer has been under pressure to boost yields since activist investor Cevian Capital disclosed a 5% stake in the insurer last year.

The Swedish investment firm has pushed Aviva to return £5bn of excess capital to shareholders by the end of this year. Aviva announced on Wednesday that it would launch a share buyback program but decide on its size at the end of the year.

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