06-07-2007
Heavy insurance bill expected
The costs of floods that have affected northern and central Britain could reach as much as £175 million, Aviva has announced.
The insurance business firm said the estimation was still uncertain as some more bad weather could hit the same areas and others in the next few weeks, the Independent reports.
"The level of loss is about where you would expect it to be, given their market share, but I think RSA has done a bit better," an Aviva analyst said.
Meanwhile, Royal & SunAlliance believes the flood bill to amount to about £55 million, but the insurer is confident that its results will meet City expectations for the full year in spite of bad results for the first half of the year.
"The losses for the industry have probably increased in the past week from what people initially thought, but I don't think it has yet reached the level to significantly hit Royal & SunAlliance or some of the Lloyd's of London insurers," a Numis analyst added.
The Association of British Insurers said the total cost of claims arising from the floods could reach around £1 billion for the insurance business.
The floods first hit South Yorkshire and the midlands two weeks ago. Hilary Benn, secretary of state for the environment, food and rural affairs announced an increase in annual spending on flood defences to £800 million a year earlier this week.