The UK property market could struggle to respond to a major weather event, as climate exposure combines with contractor shortages, rising repair costs and widespread underinsurance, according to Sedgwick.
The claims management firm’s report, The El Niño stress test: climate, capacity, and the future of property repairs, models how a strong El Niño could put pressure on the UK property repair market. It draws on Sedgwick’s experience managing 16 named storm surge events since winter 2023.
The report identified three pressures. On weather exposure, 6.3 million properties in England are at risk of flooding from rivers, the sea or surface water.
On repair capacity, 3,948 construction businesses failed in England and Wales in 2025, and 72% of SME repair contractors are affected by shortages of skilled tradespeople.
On underinsurance, 79% of the properties Sedgwick valued between January and August 2026 were underinsured, rising to 89% for commercial buildings. The properties assessed had a combined value of £3.09 billion.
“Preparing now means knowing which assets are most vulnerable, checking rebuild values, and confirming that repair partners have the capacity to respond,” said Keith Walters, director of Sedgwick Repair Solutions.
Sedgwick’s data showed cost pressures differ by claim type. Flood repairs are exposed to material price rises, with materials making up 52.21% of costs in its second-quarter data. Subsidence repairs depend heavily on labour, which accounts for 72.4% of costs, leaving them more exposed to the skills shortage.
That matters now. Subsidence claims hit a record at some insurers in August after the hottest summer on record, as Insurance Business reported.
The report identified access to contractors as a critical weakness. The problem becomes acute after a regional weather event, when many organisations need the same labour and specialists at the same time.
Ian Gibbs, national technical manager at Sedgwick Repair Solutions, said many contractors had cut capacity to match demand, and skills shortages make it hard to scale up quickly. He said pre-qualifying repair partners now meant owners could activate support rather than compete for it.
The past fortnight showed how quickly demand can build. Storms Austen and Boelo brought flooding, fallen trees and widespread damage within days of each other, as Insurance Business reported.
Sedgwick recommended that property owners map exposures across their portfolios, keep reinstatement values up to date, identify vulnerable properties, align maintenance and regulatory spending, and test access to contractors and specialists before a major event. It said evidence of that preparation can also support insurance renewal discussions.
For brokers, the underinsurance finding is the most pressing. With 89% of commercial buildings Sedgwick valued found to be underinsured, many clients risk the average clause reducing their claim payments, a problem IB has explored in its coverage of why underinsurance is an information failure. Encouraging professional rebuild valuations at renewal is a practical step, particularly as falling premiums may make clients less inclined to review cover.
The capacity findings matter too. After a major regional event, longer repair times will extend business interruption periods. Brokers should check whether clients’ indemnity periods reflect realistic rebuild timelines in a stretched contractor market.
