Risk Management Solutions has issued a preliminary estimate of the insured losses from the past week’s floods in the UK, indicating that they “could exceed £500 million [$1 billion].”
Heavy rainstorms hit Wales, Northeast England and Northern Ireland over last weekend, causing widespread flooding and the deaths of four persons. RMS said the losses appear “to be worse than the 1998 floods, which damaged around 3,000 properties and resulted in £190 million ($380 million] in today’s value of insured loss.” However, RMS noted that the losses haven’t yet reached those of the fall 2000 floods “which affected over 10,000 properties and caused £925 million ($1.851 billion] in today’s value of insured loss.” The current wet weather is, however, far from over, as “further rainfall is expected over
the weekend, which may worsen the situation.”
That prediction is backed up by the UK’s weather forecasting service, the Met Office, which has issued an early severe weather warning for all of England and Wales for this weekend. Heavy rainfall is forecast, and more flooding will result, as the already fully saturated ground cannot absorb more water.
RMS’ bulletin focused on the City of Sheffield and the surrounding area, which has been hit especially hard by the floods, particularly “in some of the major industrial and commercial riverside locations, causing substantial business interruption losses.” Much of the City’s recent redevelopment has “been built in the flood plain by the river,” RMS noted. However, Dr. Claire Souch, senior director of model management at RMS, pointed out that insured losses would be somewhat modified by lower property prices in the north of England compared to the south, as well as the fact that “buildings dry out quicker in the summer – ” provided it stops raining.
RMS also noted that the current rainfall situation is “similar to the Norwich flood of 1912,” and has been “described as a ‘one in a one hundred year event.'” The historical records indicate that this was the first time that the River Don has burst its banks with such dramatic consequences for 150 years.
RMS said it intends to continue monitoring “the flooding situation and is sending reconnaissance teams to determine the extent and severity of property damage through detailed surveys, similar to past event surveys. RMS will continue to update its estimate of insured losses as its analysis continues.”
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