As the UK switched from heatwave to warnings over heavy rain new data has highlighted the rising threat of flash floods to insurers and their policyholders.

Data, analytics and technology provider to the insurance market LexisNexis Risk Solutions said it has uncovered a unique picture of home insurance flood claims and flash flooding risk linked to surface water flooding, typically caused by sudden downpours in urban areas.

The threat of flash flooding has increased this summer with long dry spells leaving ground extremely arid only to face sudden thunderstorms and heavy rainfall.

Using LexisNexis Precision Claims database, the company’s analysis revealed key insurance claims trends around surface water flooding and river flooding:

• 70% of U.K. home insurance flood claims relate to surface water flooding caused by intense rainfall and flash flooding.
• 90% of U.K. surface water claims are valued at less than £5,000.
• Fewer than 5% of U.K. surface water claims exceed £25,000.
• Approximately 31% of flood claims occur during the summer months (July-August), broadly in line with winter (32%) and autumn (30%).  The analysis excluded Storm Babet due to its exceptional impact on October 2023 claims volumes.
• More than 90% of summer flood claims result from surface water flooding, compared with approximately 55% in winter and 75% in autumn.

In contrast, river flooding is much less frequent but much more severe when it does occur, equating to double the severity of surface water flooding. In addition, 30% of flood claims are from rivers breaking their banks, and 12% of these claims are over £25k in value.

By contrast, river, or fluvial, flooding accounts for 30% of flood claims, making it far less common than surface water flooding. However, when river flooding does occur, it is twice as severe, with 12% of claims exceeding £25,000.

Caroline Elliott-Grey, senior product manager, U.K. and Ireland insurance, LexisNexis Risk Solutions, said: “While these statistics are from home claims, they may shed some light onto commercial property risk as well, especially as we head into a softer market. A property exposed primarily to surface water risk presents a very different claims profile to one exposed to river flood risk. Treating these as a single undifferentiated “flood risk” category can create opportunities for mispricing and poor portfolio management at exactly the moment climate volatility is accelerating

LexisNexis said the analysis offers new insight into the insurance sector’s experience with surface water flooding claims vs. river flooding claims. Distinguishing surface water risk from river, or fluvial, flood risk at the individual property level is becoming increasingly critical for insurance premium pricing, underwriting decisions and property flood risk assessment.

According to the U.K.’s National Housing Federation using Environment Agency data, eight in ten homes now classified as high-risk of flooding are in England’s towns and cities — equivalent to 839,000 homes. Separately, the organisation found that the number of properties at risk from surface water flooding has tripled since 2018^[ii].

“Long periods of heat can leave soil dry and less able to absorb sudden heavy rainfall, increasing the likelihood of surface water flooding,” it added. “Following June heatwave conditions that saw record temperatures^[iii], the country experienced severe thunderstorm activity, and flash flooding disrupted the capital’s transport network, including a section of the Elizabeth Line. In London and cities such as Brighton, basements represent one of the biggest risks to insurance providers from flash flooding.”