Floods and storms pounding the U.K. may cost the insurance industry at least 500 million pounds ($822 million), a figure that may double if the weather conditions persist, according to a partner at Deloitte LLP.
The storms may also drive up insurance premiums this year, James Rakow, an insurance partner at the firm, said in an interview with Bloomberg Television today.
“If we get continued rains and storms throughout February and March, we could easily see a figure of 1 billion pounds for the industry,” he said. Rakow predicted insurance premiums may increase by 10 pounds to 15 pounds per household.
Waterlogged towns on the River Thames west of London are bracing for more flooding as the U.K. struggles to deal with the wettest weather since 1766. The British weather service says two months of record-breaking rain are related to an unusually strong North Atlantic jetstream that’s more southerly than its usual flow north of Scotland. There’s little respite likely for southern England, with meteorologists forecasting rain every day through Feb. 14.
Storms and tidal surges have buffeted Britain since December, flooding more than 8,000 homes and damaging coastal infrastructure, including the main railway connecting the southwestern city of Plymouth with the rest of England.