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Monday, 30 October, 2000, 22:18 GMT
Insurers face 200m storm damage bill
Storm damage in Bognor Regis
Reported instances of major structural damage have been rare
UK insurers were on Monday evening counting the cost of the storms that tore across the country over the previous few days.

Early estimates suggested the insurance industry might be facing claims totalling about 200m.

This would put the damage on a par with that caused earlier this month by floods and well below the estimated 2bn cost of claims arising from the 1990 storms.

The Confederation of British Industry said the adverse weather conditions might knock High Street sales, with shoppers being kept at home.

Some manufacturing output might also be set back because of damage to factories and reduced staffing levels as workers were prevented from travelling to work, it said.

Shares fall

On the stock market, insurance company shares fell as investors reacted quickly to the storm's possible impact on corporate earnings.

The UK's largest insurance group, CGNU, declined eight pence, or 1%, to 939p ahead of reporting third-quarter profits next week.

Earlier this year, CGNU reported lower than expected first-half profits due to late claims totalling 90m from French storms in December 1999.

Royal & Sun Alliance - also due to announce profits next week - lost 16.25p, or 3%, to 474.75 and Legal & General shed 2.5p, or 1%, to 165.25p.

Uncertain flood damage

Insurance analysts cautioned that it would be some time, possibly several weeks, before an accurate assessment of the storm's damage could be made.

They said the key factor would probably be the extent of flood damage which remained uncertain on Monday evening, with river levels still rising in some parts of the country.

Insurers said flood claims were already coming in from a wide range of areas including the southeast, southwest, south Wales, the Severn Valley and north London.

So far, most claims were small and not related to major structural damage.

Many related to cars caught in floods, they said.

Better prepared

"The issue is the scale of the damage to property not the strength of the wind," a spokesman for the Association of British Insurers said.

"We are talking to the Environment Agency to get an idea of the number of properties that have been affected."

Analysts also said insurers were better prepared now, through reinsurance, than they had been at the time of the 1987 or 1990 storms.

The 1987 storms had caused damage estimated at 1.25bn while those three years later resulted in a 2bn bill, insurers said.

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See also:

02 Aug 00 | Business
Storms hit CGNU profits
30 Oct 00 | UK
Storm chaos at a glance
30 Oct 00 | UK
Storm damage in pictures
30 Oct 00 | UK
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30 Oct 00 | UK Politics
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