Subsidence threat rises in UK as climate extremes reshape risk landscape – Crawford & Co

Temperature records and prolonged dryness point to escalating claims

Subsidence threat rises in UK as climate extremes reshape risk landscape – Crawford & Co

Claims

By Kenneth Araullo

The UK insurance industry is preparing for a potential surge in subsidence claims following a sequence of weather extremes, including record rainfall at the end of 2024 and persistent dry, hot conditions throughout the first half of 2025.

These patterns have raised concerns around soil movement, particularly in clay-rich areas, where shifting ground can compromise building foundations, according to new analysis from Crawford & Company.

Afzal Ahmed (pictured above) of Crawford & Company noted that the increase in subsidence claims reflects a broader shift in risk exposure linked to climate variability.

“As the ground shifts beneath our feet, the insurance claims sector must adapt quickly by seeking fresh solutions and new approaches. Proactive risk management and early intervention are now essential tools in protecting property and policyholder trust,” he said.

Historical surges in claims due to high temperatures and extended dry periods were previously recorded in 2003, 2018, and 2022. During these years, subsidence-related claim volumes rose by as much as 400%, significantly impacting insurers’ operational capacities and reserves.

Claims data from the 2022 surge highlight the scale of the issue, with around 18,000 of that year’s 23,000 total subsidence claims occurring during a brief late summer spike. According to industry estimates, the total cost to insurers reached approximately £219 million.

The volume and cost of claims during that period marked subsidence as one of the most expensive perils for UK property insurers. Analysts suggest this event could serve as a benchmark for evaluating future response models and loss reserves.

Repeating claims patterns

The pattern appears to be repeating in 2025. Met Office data up to the end of June shows England experienced its warmest June on record, with a mean temperature of 16.9°C to 2.5°C above the long-term average. Temperatures in some parts of central, southern and eastern England exceeded 30°C.

The Met Office also reported pronounced regional rainfall differences, with southern and eastern England registering below-average rainfall for five consecutive months, while parts of Wales, Scotland and Northern Ireland experienced wetter-than-average conditions. The same period saw elevated sunshine hours and increased soil moisture depletion, as tracked by the MORECS system.

Current claims volumes remain in line with normal levels for April to June. However, Crawford has observed initial signs of clay shrinkage-related movement and has begun monitoring properties that could be affected. The firm expects the situation to escalate unless conditions shift. Forecasts extending into August suggest the dry and hot weather is likely to persist.

According to the Met Office’s three-month outlook issued on July 1, there is an increased likelihood of above-average temperatures through September. The update indicated the possibility of temperatures reaching 36°C in London and a heightened chance of heatwaves and associated impacts. The forecast is issued for contingency planners in both the public and private sectors and supports scenario-based preparation for environmental risk.

In response, Crawford has elevated its internal surge risk status to “High Amber” and stated that the volume of claims handled by Association of British Insurers (ABI) members could exceed the 2023 and 2024 seasonal averages.

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