UK heatwave: a global warning for insurers3 Minute Read
With forecasts warning that the UK could experience its hottest day on record this weekend, many predict that hotter, drier summers will become commonplace across the globe due to climate change.
Alarmingly, all of the top 10 warmest years in the UK have occurred since 2002, with the most recent decade from 2010-2019 being 0.9 degrees warmer on average than the 30 years between 1961 and 1990.
Often overlooked however, is the impact that this warmer weather will have on the insurance industry, which is responsible for protecting businesses and individuals across the country from weather-related events which are out of their control.
Impact of global warming on insurers
One of the key issues facing insurers as a result of a warmer climate is the increased risk of property subsidence, as the ground becomes drier and the soil around their foundations begins to move. This can cause major structural damage to a building and is often very costly to repair, especially for those who were previously unaware that the property was at risk.
Those properties with older pipes constructed on clay soils may also be at risk of pipe failure as the ground dries out, further amplifying concerns for the property owner, as well as the potential cost.
In addition to subsidence, a general increase in temperature will continue to cause a rise in sea levels, putting millions of coastal properties across the UK at further risk of flooding and coastal erosion.
How the industry can get ready
While governments and high-emitting industries are doing all they can to reduce their impact on the environment, predictions indicate that the UK could be as much as 1.5C warmer by 2050, meaning that the issues discussed above will only become more prevalent for insurers as time goes on.
For this reason, the industry must do all it can to get ahead of the game and minimise its exposure to costly, heat-related risks. To do this, insurers will need to have access to the most up-to-date data that provides an in-depth overview of the risks they may be exposed to and the extent to which they are exposed.
This is key to what we do at Addresscloud. We use our state-of-the-art geo-location mapping technology to help insurers accurately identify properties on cover at rooftop level, and supplement that with data from leading providers to assess how at-risk these properties are from perils such as subsidence, flooding and coastal erosion. This allows insurers to make sure they are providing their clients with right level of cover, as well as managing their own exposure to these risks across their portfolio.
As warmer weather becomes the norm across the UK, insurers must ensure they are protected from the resulting issues it will cause to the country’s built infrastructure, including both residential and commercial property.
Making sure your business is adequately prepared for future risk is fundamental in protecting yourselves and your clients properly, and could save you a significant amount of time and money should you be impacted by any of these issues.
Click here to find out more about how Addresscloud can help you to prepare for the future.
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