Aviva’s logic-defying price rise

The coldest winter in 30 years just cost insurers a further £650m, hitting balance sheets already reeling from a string of extreme-weather-related losses. The vast majority of property damage claims related to homes – 60,200 claims out of 66,600 – so it’s not surprising that insurers are putting up prices for household insurance, raising policy excesses and, in some cases, pulling cover from the most vulnerable areas. Some, like AXA, have been open about it, saying premium levels are no longer sustainable. Its rate rises will be concentrated in the most exposed postcodes, for people over 50 who are most likely to be away at the coldest times of the year, and for second homes and buy-to-let properties. Others are more cagey: Aviva is investing in ultra-precise flood mapping technology to determine, for example, which houses within a postcode are at the bottom of the hill. But its spokesman was adamant that it won’t use this information to give higher quotes to vulnerable homeowners, only to offer better prices to the safer ones. Hmm…