The U.K. Floods: Record-Breaking December – How Bad Was it?

December 2015 saw Storms Desmond, Eva and Frank hit the U.K. leaving widespread flooding in its wake, breaking meteorological records and causing the insurance industry a £1.3bn headache. The flooding made headlines across the U.K., sparking a debate over the impact of climate variability, flood defense infrastructure and, once again, the applicability of earnings protections in the insurance industry.

So, how impactful were the December 2015 events?

Not an Exceptional Event from a Catastrophic Loss Perspective


U.K. Floods

This article is the first in a three-part series about flooding in the U.K.

Despite the headlines, the recent U.K. floods were not an exceptional catastrophe event on a national scale of losses.

Yes, there were localised extremes and record-breaking river flows in some locations, but these were not wide-spread across the U.K. In areas such as Carlisle and York the flood defenses were overcome by the sheer volume of water and consequential extreme river flows.

Insured Losses: A Big Deal?

Willis Re estimates that the insured losses from the December events are in the order of £1.3bn across all lines of business. Since 1982, Willis Re estimates that there have been five events that exceeded a £1bn threshold (indexed and scaled to reflect market growth). Given this observation, the largest single period of the December 2015 loss could be expected to occur every 5 to 10 years.

British Flood Events

However the average claim size is higher than that of recent records and is a source of concern. For instance, the 2007 events had an average claim size of around £25,000, and 2012, 2013 and 2014 average claims exhibited even lower averages.

Unusually High Claim Sizes

The 2015 average claim size was significantly higher than the 2007 average and more in line with the 2005 record, a year where floods affected a similar part of the country.

The elevated December 2015 average claim size is then partly explained by the exposure that it hit, also the short, sudden catchment characteristics (meaning that alerting the public and mitigating claims is then more difficult).

Overall, the December 2015 events from an insured loss perspective were not exceptional on a national scale; however, the average claim size was significantly higher than those of recent years. This latter observation highlights those extreme local hydrologic conditions as well as specific insured property characteristics and resilience measures.

Investigating extreme hydrologic conditions often leads to the question of whether events, such as those of December 2015, will become more frequent in the future as well as whether climate change is a contributing factor to localised rainfall extremes. The Willis Research Network is currently studying this topic and we will be sharing some of our findings in the near future.

This blog is the first in a three-part series. We will continue to consider whether extreme flows are becoming more frequent, how modelling technology needs to evolve to ensure the re/insurance industry becomes more resilient to such events. These topics will be examined in future blogs over the coming weeks.



timedwards_175 Guest blogger Tim Edwards leads Willis Towers Watson’s European catastrophe modelling services (CMS) team and has 12 years’ analytics experience. Tim holds a BSC Economics degree and is an Associate of the Chartered Institute of Insurance. He overseas catastrophe modelling strategy and implementation for European clients.

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