We explored the broader relationship between climate change and insurance in the UK in a previous article in October 2023 (Click here to read the article). Recent global events, such as the floods in the UK and the unprecedented fire-related damages in Los Angeles, have brought the conversation about climate change and its impact on insurance premiums to the forefront.
For the affected organisations, these events are stark reminders of the rising financial risks associated with climate change. At Sustain Insurance Brokers, we’re committed to helping organisations navigate these challenges with bespoke insurance solutions that mitigate the impact of climate-driven risks.
A Rising Tide of Costs
The frequency and severity of climate-related events are increasing. In the UK alone, record-breaking rainfall has caused widespread flooding, affecting thousands of properties, disrupting businesses and straining local economies. Such events are no longer viewed as anomalies but as recurring risks that insurers must account for when calculating premiums.
For example:
- The Environment Agency predicts that winter rainfall could increase by up to 25% in the coming decades, exacerbating flood risks (The Environment Agency, 2025).
- Flood-related claims in the UK are expected to rise significantly, with one in four properties at risk of flooding by 2050 (BBC, December 2024).
These projections create a ripple effect, driving up premiums for policies like Property Owners’ Insurance and Contractors’ All Risks Insurance, which cover physical assets exposed to environmental hazards.
How Climate Risks Shape Premiums
Insurers assess premiums based on the likelihood and potential cost of claims.
Climate change complicates this process by introducing:
- Increased Uncertainty: Predicting the frequency and magnitude of events like floods and storms becomes more challenging.
- Higher Claims Costs: The cost to repair or replace damaged assets is escalating due to inflation and the growing intensity of natural disasters.
- Regional Vulnerabilities: Properties located in flood-prone or coastal areas may see sharper premium hikes due to localised risks.
Sustain Insurance Brokers: Supporting Businesses Through Change
At Sustain Insurance Brokers, we recognise that businesses need more than generic solutions in the face of climate change. Our expertise in bespoke commercial insurance programs ensures that your organisation is protected against emerging risks while optimising coverage costs. Here’s how we help:
Bespoke Insurance Solutions: Our product-agnostic approach enables us to craft policies that align with your unique needs. For instance:
- Property Owners Insurance: Protects your physical assets from climate-related damages.
- Contractors’ All Risks Insurance: Covers projects that are exposed to weather disruptions, ensuring financial resilience.
Preparing for the Future
As the UK braces for more frequent and severe weather events, businesses must adapt to the changing landscape. At Sustain Insurance Brokers, we are more than just your insurance partner; we are your advocate in building resilience against climate change.
Our commitment to sustainability and innovation positions us uniquely to address the challenges posed by climate change. By recognising and rewarding your ESG efforts, we work to secure the most favourable terms and conditions for your coverage. Book a meeting through the link below and discover how we can support you.
