Subsidence View - June 2018
Welcome to first "Subsidence View" for 2018. In this issue we take a retrospective look at subsidence numbers in 2017 and take an early look at what 2018 has in store.
Last year?– 2017 was generally regarded as a "near miss" in terms of a large uplift in subsidence claim numbers. With below average rainfall in winter and spring in the clay soil areas of the south east, followed by record temperatures in July, the insurance industry was gearing up for a significant increase in subsidence claims for the first time since 2006. A wet and cold August brought properties back from the brink, with the MORECS soil moisture deficit reducing significantly, with a only a "normal" seasonal uplift of claims recorded at the end of the summer into autumn.
So what of 2018 so far?– Whilst the winter delivered snow and the coldest temperatures since 2010, rainfall was around average. May was the hottest since records began, beating the previous best year of 1992 (which incidentally was a subsidence claims surge year).
The MORECS measure of Soil Moisture Deficit is average for the time of year, currently lying between the two significant surge years of 2003 and 2006.
It is now 12 years since the UK insurance industry experienced a significant and costly surge of subsidence claims, so could 2018 be the next one? Well history has shown what has gone so far will have little relevance to the final subsidence numbers we will see in 2018. The surge of 2003 followed a prolonged wet and cold winter, whereas dry winters have been followed by summers which have yielded much lower claim numbers. What we do know is that an extended period of exceptionally hot, dry weather between June and September, particularly in the clay soil areas of the south east, will be the deciding factor.
So what does the summer weather look like?
– The Met Office and BBC are both continuing their recent strategies of limiting their forecasts to 30 days ahead. The BBC forecast to 8th
July is for "a change to calmer and warmer conditions for many". For more details see:https://www.bbc.co.uk/weather/outlook
However, this has not stopped a positive spin from the media with headlines such as:
UK set for hotter than average summer, met Office predicts (Daily Telegraph 11/6/2018)
UK weather: forecasters predict long hot summer (The Guardian 10/6/2018)
The Weather Outlook (TWO) have been much bolder and issued their first forecast for June, July and August. The headline is for "a mixed summer with the driest spells likely early and late". For more details see:
Although the likelihood of an early start to any upturn (similar to 2006) now appears to have reduced, the surge risk remains and is currently assessed as Mid- Amber. At this stage, our prediction for 2018 is for ABI claim numbers to be higher than the previous 3 year average of 16,000 and we recommend that insurers review their surge response plans and remain vigilant.