As the UK experiences increasingly prolonged periods of extreme heat, insurers are facing a growing challenge: the rising risk of subsidence across residential and commercial properties.
Historically considered a relatively infrequent peril, subsidence is becoming a more material concern for the UK insurance market as hotter, drier summers place greater strain on the country's ageing housing stock and underlying soil conditions.
In a recent article published by Insurance Business UK, Alfie Richardson, Underwriting Manager at Iprism, highlights how repeated heat events are driving changes in underwriting practices and risk assessment across the market.
“Longer, hotter and drier summers inevitably lead to increased soil shrinkage, which in turn drives a significant rise in subsidence claims activity,” says Richardson.
Why Extreme Heat Increases Subsidence Risk
Subsidence occurs when the ground beneath a property contracts or shifts, causing building foundations to move. Extended periods of hot, dry weather can significantly increase this risk, particularly in areas with clay-rich soils that are prone to shrinking as moisture levels fall.
The UK has already seen evidence of this trend. Recent heatwaves have resulted in notable spikes in subsidence claims, placing additional pressure on insurers and highlighting the growing impact of climate-related property risks.
As weather patterns become less predictable, insurers can no longer rely solely on historical claims data to forecast future exposure. Instead, underwriting models are evolving to account for changing environmental conditions and emerging climate risks.
The Challenge of an Ageing Housing Stock
The UK's ageing housing stock presents another layer of complexity. Many properties were constructed decades before current climate conditions were anticipated, leaving them more vulnerable to foundation movement and structural damage.
For insurers, this means assessing not only geographical exposure and soil conditions but also the age, construction type and resilience of individual properties. Understanding these factors is becoming increasingly important when evaluating subsidence risk and pricing cover appropriately.
Rising Costs and Repair Inflation
Alongside increasing claims frequency, repair costs continue to rise. Inflation within the construction sector, shortages of specialist labour and the complexity of subsidence remediation work are all contributing to higher claims costs.
This combination of increased claim volumes and rising repair expenses is forcing insurers to reassess their approach to risk selection, pricing and portfolio management.
Adapting to a Changing Risk Landscape
Climate change is transforming the property insurance landscape. As extreme weather events become more frequent and severe, insurers must continually refine their underwriting strategies and risk models to remain resilient.
The growing prevalence of subsidence serves as a clear example of how environmental changes are creating new challenges for the industry. Insurers, brokers and property owners alike will need to adapt as climate-related risks continue to evolve.
For a deeper insight into how heatwaves are changing the way insurers assess subsidence exposure, read Alfie Richardson's full interview with Insurance Business UK. https://www.insurancebusinessmag.com/uk/news/property-insurance/uk-heatwave-is-changing-how-insurers-assess-subsidence-risk-576916.aspx
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