Monday 17 March 2008

Home Insurance Industry set to pay out £30m

Apparently, on the 27th February, at nearly 1am, there was an earthquake in the UK. I didn't notice it, but It lasted approximately two minutes, registered 5.2 on the Richter scale, and was overall a very British sort of earthquake - the only injuries were caused by falling chimney pots, and across most of the nation people could be heard saying things like "Well I never!" or "Now there's a thing!", before tutting, rearranging their shelves, and returning to whatever book they were reading in bed. Oh, and at least one tabloid found a semi-naked young couple, for whom that night the earth had moved a little more than usual, with which to adorn its front page. Not so much the Lincolnshire Earthquake, then, as "Carry On Up The Richter". But I'm making light of it.

For some people the earthquake has been quite a serious business. Gordon Brown, for one. Having in such a short space of time presided over floods, war, pestilence (foot and mouth, hospital superbugs, bird flu), terrorism attempts, the beginnings of a recession, and now an earthquake as well, he's increasingly coming to resemble some kind of harbinger of the apocalypse. I'd be worrying that famine might be next, but I'm told that it's been around for a while now already, we've just been outsourcing it to poorer countries.

Financially speaking, though, the real losers from the Lincolnshire Quake were, of course, the home insurance companies.

What, no tears? Not even crocodile ones?

If I wanted to evoke sympathy I probably shouldn't have placed that sentence so close to the previous one, really, should I? Of course, evoking sympathy wasn't my intention. What I actually wanted to do was start talking about estimates of how much this latest earthquake might end up costing the UK's insurance industry.

Last April, a smaller earthquake (4.2 on the Richter scale) in Folkestone, Kent, apparently cost insurance companies something like £15m. This February's, they say, will cost them as much as £30m - the Lincolnshire Quake was thirty times larger, but its full impact was centred upon a more rural area. In either case, that's quite a lot of money to lose on something that lasts barely a couple of minutes.
As I was intimating above, though, it's hard to care about the losses of an industry that makes vast profits on the back of other people's fears. In fact, when something like this happens it's tempting to believe that it really was an Act of God and rejoice that He doesn't seem to like insurance companies, either. But perhaps not: after two quakes within less than a year, what better excuse to raise your premiums and make everything back and more?

But I'm being cynical. And flippant. We Brits tend to be. And like I said, this was a very British earthquake - the sum total of the chaos seems to have been, someone breaking a pelvis, some buildings getting a bit cracked, and a chicken laying a particularly large egg. That kind of earthquake is pretty easy to be cynical about. And so's insurance.

If only all natural disasters might be so British, though. And so well insured.

No comments: