This piece is by Caroline Elliott-Grey, senior product manager, U.K. and Ireland, LexisNexis Risk Solutions
The unseasonal warmth that spring has brought to the far reaches of the UK is being enjoyed by many. However, coming hot on the heels of a particularly wet winter in which Southern England received 153% of the 1991–2020 average rainfall, these conditions are proving ideal for the shrink-swell cycle that causes subsidence. It’s too soon to say what impact the current weather will have on future claims, but signs are not encouraging. Subsidence claims are already on the rise; flood and subsidence claims increased by 58% between 2016 and 2024, and more homeowners are being affected, paying around £318 more for their insurance on averagei.
Prolonged dry weather and high temperatures can cause clay soils to shrink and crack, resulting in ground movement and structural damage. Conversely, extended periods of wet weather can cause clay soils to expand, which may also lead to ground shifts and harm building foundations.
Redressing the financial burden of subsidence with data
As climate change accelerates though, geospatial intelligence data is rapidly evolving to become a key tool for insurance providers in managing property risk. It not only supports more accurate and fair pricing but can also play a vital role in managing and mitigating risk, particularly for issues like subsidence, which is highly sensitive to environmental changes and can be incredibly localised depending on soil type.
Indeed, the localised nature of subsidence becomes more evident in analysis from LexisNexis® Risk Solutions, based on British Geological Survey dataii. It projects that by 2050, an additional 1.2 million homes in England will be at risk of subsidence. Notably, the Oxford-Cambridge Arc, characterised by a mix of clay soils and chalk, is particularly vulnerable. This is especially concerning given the significant housing development planned for the region.
The knock-on impact of building on land liable to subsidence is worrying. In Q2 2023, subsidence payouts reached £54 millioniii, likely due to the previous summer. Then in Q3 2024 subsidence claims rose to £66 million, this was a 61% increase compared to Q3 2023iv. So, as weather patterns become increasingly extreme, leveraging geospatial intelligence and real-time data enables more accurate risk assessment and proactive management of evolving environmental threats.
Postcode data is no longer enough
Increasing housing density and evolving climate risk means that risk assessment at postcode level is, in many cases insufficient. Insurance providers need to understand the terrain on which the property they are quoting for sits. This is where geospatial intelligence truly proves its value. Tools like LexisNexis® Map View enable insurance providers to quickly identify areas of heightened subsidence risk and assess how those risks align with their existing portfolios. These systems integrate multiple data layers, including soil type and clay content, tree cover and proximity, as well as property age and construction details, including the potential presence of a basement.
The result is a highly granular risk profile for each property, enabling personalised quotes based on a property’s exact risk exposure, even down to its foundations and structural characteristics.
What’s more, by visualising risk using geospatial intelligence data, insurance providers can map exposures and accumulations. This is especially important with a slow, creeping risk, like subsidence, a silent menace that can take time to show its true colours. By revealing risk, insurance providers can
also inform policyholders and help them mitigate damage, by suggesting effective maintenance of nearby trees, for example.
The UK Government estimates that 300,000 new homes are needed annually to meet its target of 1.5 million homes over the current parliamentary termv. This pressure on local authorities makes development on land prone to subsidence increasingly likely. When combined with the lasting impact of climate change on the risk landscape, it becomes clear that insurance providers need to embrace data-driven approaches to effectively assess and manage subsidence risk. Geospatial intelligence data is becoming the unsung hero in this field.
ii This risk has been illustrated by British Geological Survey data with cutting edge analysis and expertise in data applied by LexisNexis Risk Solutions (LNRS), part of data & analytics giant RELX plc. The analysis highlights risk areas while accounting for a wide range of geological, weather and climate data.
iii https://www.abi.org.uk/news/news-articles/2023/9/home-insurance-payouts-up-11/
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