With UK homeowners and businesses battling the lasting impacts of Storm Bert and Darragh, Quadient (Euronext Paris: QDT) warns that 2025 will be a record year for flooding-related costs for both insurers and homeowners if attitudes towards communication don’t change. The Association of British Insurers has seen a year-on-year rise in property claim payouts due to weather, with claims reaching £136 million in Q3 2024 alone. And with more than 5.5 million homes and properties in England at risk of flooding, insurers need to ensure their approach equips customers with the tools they need to mitigate damage before it’s too late. However, Quadient research from 2024 shows that only 17% of UK consumers believe that that insurance industry communicates effectively with customers.
The cost of flooding spreads far wider than insurance payouts, with a significant impact on UK spending and budget. Flood prevention costs the UK £2.2 billion every year, and the government has committed £2.4 billion over 2024-25 and 2025-26 for flood defences.
Alan Newman, Enterprise Manager, Insurance at Quadient, said: “The impact of climate change is being felt across the UK as the frequency of and devastation caused by floods continue to increase. Many people experienced first-hand the damage that the various storms in 2024 caused, and we will no doubt see the same if not worse this year. However, the damage caused by floods is being exacerbated by a lack of proactive communication from insurers to flood-prone customers. A mindset and technological change from the insurance industry is long overdue to give customers the best possible advice before, not after, a flood happens.”
There is already technology and data available that allows proactive and personalised communications to customers. The issue is it isn’t always being used in this way. For instance, many insurers aren’t connecting the data from water sensors and meters to their communication strategies. As an example, when water rises to a certain level insurers could automatically warn customers and provide personalised prevention advice based on each customer’s location or circumstance. If a storm is predicted, the company could also automatically remind customers about what their policy does and doesn’t cover and precautions the customer could take to reduce the risk of a claim.
“Communication from insurers has traditionally been reactive rather than proactive,” continued Newman. “The industry plays a significant part in reducing the impact of floods, both before and after they happen – and this starts with better customer communication. As well as being timely, it is vital that all communications are clear and simple so that customers can quickly and easily understand the steps they need to take. We’ve seen how the likes of Consumer Duty in financial services has made really clear communication essential, and so something similar for insurance could play dividends. Flooding is already an incredibly stressful experience for many people. Ensuring it offers advise before, during, and after the worst happens, will help the insurance industry reduce the risk of being seen as simple profiteers.”
