£368 Million To Be Saved by The UK Home Insurance Industry Over 2020

£368,326,000

…is the estimated amount that is to be saved by the home insurance industry over 2020, thanks to the Covid-related restrictions taken across the UK almost all year long.

*The first lockdown took place between 23rd March to 31st May 2020

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Insurance claims drop durig 1st lockdown

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Estimated home insurance savings over 2020

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This map shows the decline in home insurance claims at the highest scale of restrictions measures that were taken in the UK – with a strict national lockdown imposed from March 23rd to May 31st. Even if those measures were lifted afterwards, the savings made by the home insurance industry over 2020 are to be very important overall:

12,4%
overall drop in home insurance claims
 

…across the UK during the whole 2020 year

£99,8 millions
saved in payouts only on water claims

…by the UK home insurance companies over 2020

13,3%
decrease in theft / burglary claims

…as many people where stuck at home because of the restriction measures

A significant decline in home insurance claims in 2020 

With many British citizens forced to stay home during long months, domestic incidents decreased in a significant proportion since the beginning of 2020. Indeed, whilst being at home – working, on furlough or looking after kids unable to go to school – people avoided much damages to happen – whether being theft, water damage and other classic domestic damage that often usually occur when the house is empty. For example :

  • Residential burglaries decreased significantly in some across the UK. Indeed, the number of burglaries dropped by 37% during lockdown 1, and should drop by 13,3% over year 2020 – meaning £47,6 million saved by the home insurance industry on this unique item
  • Water-related claims are expected do decline by an overall 13% over 2020 year in comparison with 2019, which means £97,8 saved on home insurance payouts related to this kind of damage by the industry.

The below graph shows on which extent home insurance claims have dropped:

Greater London the UK region with highest savings on home insurance payouts

When looking at the UK regions where the home insurance industry could have saved the most on payouts, the ranking shows that:

  • Greater London is the region where savings could be the highest in 2020, reaching more £54 million over the year. South East Englands ranks second, just £2 million down
  • On the other way round, Northern Ireland (£10 million savings) and North East England (£14,7 million) are the regions where savings on home insurance payouts have been the lowest.
RegionsTotal estimated savings on home insurance payout expected for 2020
London£54,074,870
South East (England)£52,612,654
North West (England)£42,755,157
East of England£32,185,935
Scotland£30,666,965
South West (England)£29,428,533
West Midlands (England)£29,213,449
Yorkshire and The Humber£28,211,559
East midlands (England)£26,994,578
Wales£17,340,467
North East (England)£14,680,303
Northern Ireland£10,072,091
Estimated savings on home insurance payouts over 2020 per region

You can report to the map above to consult the drop rates that occurred in home insurance claims during the first lockdown period in the UK (23rd of March – 31st of May 2020).

Should the home insurance industry give the money back?

As shows the study, 2020 is to be a year of considerable savings for the UK home insurance industry. Home insurance premiums in the UK have been constantly increasing (actually by 27% over the last 3 years according to Money Super Market) and represent a significant expense in households’ budget – with an average £153 annual premium for British households.

If not a refund, home insurance policyholders should expect a decline in their premiums – at least for 2021. That would be a fair gesture from the industry, when the country is just entering an unprecedented economic crisis that may last several years.

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Antoine Fruchard, insurance expert and CEO at Hello-Safe.co.uk

It is not a surprise to see that home insurance claims have decreased in the significant way over 2020, with much Britons stuck at home during a year where very restrictive measures where taken to stop the Covid-19 pandemic. Indeed, as we observed with car or health insurance products, the payouts made by home insurers have gone down. However, until now, the industry has taken no decision to give back some of the savings made to the policyholders. This is a questionable position, when the impact of the economic crisis is just starting to strike most of the British households, and could last for years. Moreover, many workers will now make the decision to work from home, fully or partially. For those remote workers, the insurers will surely have to adapt and propose new solutions. Indeed, the future of home insurance is still to create”.

Our methodology

We based our study on public information provided by reliable data-providers, both public and private. For further information on our editorial guidelines please click here.

About Hello-Safe.co.uk

Hello-safe.co.uk is a comparison platform which is shaking up the insurance market – giving you access to the best UK insurance deals in less than 30 seconds. Safe is supported and financed by Blue, an Insuretech Venture Capital firm. We have developed a unique comparison technology that gives access to cover details and quotes without customers having to give their phone number or email address. This engine is the result of four years of hard work.

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