LONDON (Reuters) - British insurers look set to absorb 1 billion pounds ($1.59 billion) of flood-related claims this year, their biggest flood damage bill since 2007, accountancy firm PricewaterhouseCoopers said on Friday.
Heavy flooding during the summer inflicted a loss of about 500 million pounds on the industry, and further inundations this week across England and Wales are likely to boost the total for the year to 1 billion pounds, PwC said.
That would be the most since 2007, when severe flooding in several parts of England triggered claims of about 3 billion pounds, according to the Association of British Insurers.
The fresh wave of flood damage comes as the insurance industry is locked in talks with the government over how to guarantee affordable insurance for homes in flood-prone regions once an existing subsidy arrangement expires next year.
The industry’s favored solution, a fund financed by a levy on low risk households and backstopped by the taxpayer, could fail because the government is reluctant to act as insurer of last resort, industry sources told Reuters on Thursday.
“Who will step in to insure homeowners exposed to flood risk remains a key question for insurers and customers alike,” said Domenico Del Re, PwC’s head of catastrophe management.
Britain’s Environment Agency said 59 flood warnings, indicating that flooding is expected, were in place across England on Friday.
Reporting by Myles Neligan; Editing by Helen Massy-Beresford