Insurers facing worst flood damage bills since 2007

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British insurers are expected to face the worst flood damage bills since 2007, PricewaterhouseCoopers (Pwc) has warned.

The forecast - which was made even before this weekend's heavy flooding - was also predicted to result in the associated costs being passed onto customers. 

Mohammad Khan, insurance partners, PwC, said: "Using summer flood damage as a proxy to the recent flooding across the UK, we estimate the cost to industry in 2012 to now add up to around £1bn."

PwC said the period between April and June was the wettest since records began, with insurance losses form the flooding estimated at £500m.

Meanwhile, Domenico Del Re, PwC's head of catastrophe management, also flagged up the uncertainty surrounding the imminent expiration of the Statement of Principles in June next year.

"Given the recent weather and impact of flooding in 2012 overall, homeowners exposed to flood risk might potentially find it unaffordable to purchase flood protection next summer," he said.

"Who will step in to insure homeowners exposed to flood risk, remains a key question for insurers and customers alike. For example, will the cost be transferred to the taxpayer, similar to the US' federal flood insurance scheme?"

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