Storm Chandra is the latest severe weather event to test how UK insurers assess and manage property risk. While immediate attention often focuses on claims and operational response, storms like Chandra also feed into longer-term pricing and underwriting decisions, without necessarily triggering abrupt change.
Matthew Birney, director of pricing at Atec, said insurers already hold an established view of weather risk, shaped by severity and geography.
“We have our current view of weather risk on both a severity and a geographic level,” Birney said. “And I think, any of these events, give us a means of evaluating the predictive part of those models and seeing if there is a trend away from what [that] current view is.”
While recent weather appears more intense than in the past, Birney said translating that perception into pricing action requires caution. “I suppose it's trying to quantify and therefore building pricing on long-term trends and capturing that within the pricing structures.”
Birney said insurers tend to separate short-term underwriting responses from longer-term pricing strategy.
That includes limiting last-minute cover when severe weather is forecast. “There's a trend of people maybe who aren't insured [who] try to insure when they see the weather forecast. And we try to sort of shut the front door on that,” Birney said.
Pricing decisions, however, are approached more gradually. “On a more sort of long-term price and strategic level, we try not to be too knee-jerk in these things,” he said. “We have a long-term view that an average view of what we think weather should look like, averaged over a longer-term period.”
Birney added that sudden shifts can create their own risk. “We kind of have to put our customers and potential customers at risk by making a major decision,” he said.
Storm events also sharpen focus on particular risk types, especially within the non-standard property market.
“One of our big markets would be unoccupied properties,” he said. That is one area that comes under closer scrutiny, both from the storm impact and because catastrophic weather often brings low temperatures.
Those conditions increase exposure to escape of water claims. “That brings with it potential burst pipes in a scheme of water type claims,” Birney said.
Delayed discovery often worsens losses. “The clue's in the name. The properties aren't occupied, so there can be a bit of a lag until you realize the severity of that,” Birney said. “There might be a lag before property owners actually get to the property to even realize that there's an issue.”
As weather risk becomes more complex, insurers face pressure to reconcile accurate pricing with affordability, particularly in higher-risk areas. In flood-exposed parts of the market, that tension is partly addressed through government intervention. Birney referenced Flood Re, the government-backed scheme for high-risk flood areas.
From a non-standard perspective, he said withdrawal from risk is not the preferred response. “We try to offer quotes of affordable prices and what we would define as underserved areas of the market,” Birney said. “So a high-risk storm, whilst there wouldn't be a core-market for us, it's certainly not something that we would decline to quote for.”
Birney does not expect Storm Chandra alone to materially affect renewal behaviour. Instead, he described Chandra as one input among many.
Asked whether weather events are becoming more severe overall, Birney said the answer remains difficult to quantify. “I think the answer is yes,” he said. “Even the biggest [companies] in the market are struggling to qualify.”
He added that shifting geographic patterns are adding complexity. “The data sets and the models that have been parameterized over whatever X amount of years, maybe aren't as predictive as they were when they were created.”
For insurers, Storm Chandra may not prompt immediate recalibration, but it reinforces the growing uncertainty around how weather risk should be priced.
