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Insurers’ flood costs set to reach £2.5bn insurers

Aviva and Zurich look set to be the insurers worst hit by this summer’s floods.

After a torrent of claims, Aviva says it is expecting flood claims to cost £340m, split £175m for the June floods and £165m for July.

Zurich estimates the June floods cost it £200m and it has not yet issued a forecast for the damage caused last month.

As the reporting season gathers momentum, several insurers have revealed the impact of the floods on company earnings.

Legal & General says July’s flooding will cost it around £30m, on top of the £38m from the floods in June, while Allianz Insurance estimates its total bill will reach £60m.

Royal and Sun Alliance says the June floods cost it £55m and has yet to announce the impact of claims for July. Lloyds TSB says the June floods will cost it £45m and Halifax estimates £60m but neither has yet given an assessment for July. Axa and Churchill have yet to release any figures.

The Association of British Insurers estimates that the total cost of the summer floods for insurers will run to more than £2.5bn.

Royal and Sun Alliance spokesman Jon Sellers says: “It has taken some time to get to the worst-affected areas. We are in there now and assessing the damage but it will take a bit of time to forecast what the effect of the July floods will be.”

Rating agency Moody’s says the floods are unlikely to have an impact on non-life insurers’ credit ratings.

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