More than 10% of properties in parts of the south coast of England and Wales could see their flood risk increase by 2030, according to analysis by LexisNexis Risk Solutions.
The data and analytics provider said the increase would be driven by rising sea levels and more expected rainfall. It warned that insurers risk severe losses if underwriters accept new business and renewals without seeing how much flood exposure is already concentrated in an area.
LexisNexis said accumulation and exposure data held by catastrophe and exposure management teams is often updated only periodically and kept separate from day-to-day underwriting. Because climate perils change, an area’s risk profile can shift significantly between reports.
“This can increase the likelihood that underwriters will renew a policy or write new business without realising how much risk is already concentrated in a particular location,” said Caroline Elliott-Grey, senior product manager for insurance at LexisNexis Risk Solutions in the UK and Ireland.
Elliott-Grey said that in a soft market, insurers were under pressure to assess property risk more fully and more quickly.
LexisNexis has updated its Map View platform to bring accumulation and exposure data into underwriting at the point of quote. The changes include tools to identify concentrations of sums insured, monitor exposure in defined areas over time, and apply rules such as restricting quotes or adjusting excesses in particular locations.
The warning echoes other recent research. Gallagher Re found last month that 32 of Germany’s 37 largest flood events since 2002 were driven by heavy rainfall rather than rivers, with losses increasingly falling outside traditional flood zones and creating accumulations that historical data may miss.
In the UK, Sedgwick’s analysis puts 6.3 million properties in England at risk of flooding from rivers, the sea or surface water. It also found 79% of the properties it valued this year were underinsured.
The risk is building while home insurance prices fall. Competitive home premiums were 4.4% lower in September than a year earlier, according to Defaqto, and almost 17% below their level two years ago. Recent storms have also shown how quickly losses can concentrate, with Storm Boelo bringing coastal flooding to Scottish towns last month.
LexisNexis linked its warning to the possibility of a strong El Niño bringing heavy rain this winter. El Niño’s influence on UK weather is generally considered weak and uncertain, so it is better treated as one scenario than a forecast.
For insurers, the analysis points to a practical risk: accepting more business in areas where flood exposure is rising, without seeing the cumulative effect until a major event. That matters more in a soft market, where competition for business can outrun risk selection.
For brokers, the effect may show up as tighter terms or restricted appetite in specific locations, even as headline prices fall. Clients on the south coast and in Wales should expect more scrutiny of flood risk, and resilience measures may become more important in securing cover, especially for homes built after 2009 that fall outside Flood Re.
