PwC says insurance payouts from UK storms may well reach £1.2bn

Consultancy PwC yesterday raised its estimate of insured losses from UK Storms Desmond and Eva to between £900 million and £1.2 billion from an earlier range of £700 million to £1 billion. Insurers are facing some of the costliest British floods on record following the two storms. PwC estimated total economic losses from the earlier storms at £1.6 billion to £2.3 billion. “The storms this time have generated a far greater proportion of non-insured losses compared to the total economic damage,” said Mohammad Khan, general insurance leader at PwC, said in a statement. “Many of the smaller and family-run businesses that have been impacted by Eva and Desmond will not have commercial insurance in place due to the impact of the recession and lower business volumes in recent years.” A government-backed scheme to make flood insurance affordable is due to launch in April. But the scheme, Flood Re, does not cover small businesses. Moreover, consultancy KPMG this week estimated insured losses from the recent floods at £1 billion to £1.5 billion, and economic losses of more than £5 billion, including £2 billion for flood defences. PwC said its estimates excluded the cost of flood defences,...