Clay shrinkage subsidence is the leading cause of subsidence in the UK. It is predominantly focussed in the South East of England (London specifically) where the geology is a highly shrinkable clay soil.
In 2018 and 2022, subsidence surge events were declared due to unprecedented hot summers resulting in 23,000 subsidence claims in both these years (annual average usually 12,000).
Clay shrinkage subsidence is an increasing and widening risk with claim volumes expected to rise in London by 57.3% by 2070. Further, it is anticipated to expand into areas previously unaffected by clay shrinkage subsidence. The financial implication of this is estimated to be around £1.9 billion.
Aggravating factors for insurers:
- Historically, the most cost-effective way to resolve a subsidence claim has been to remove the tree. However, recent legislation, climate interest groups and targets for tree retention are preventing/delaying the removal of trees.
- High profile mass tree removal incidents (Sheffield & Plymouth) have resulted in legislation to prevent street tree removal without consultation with the public
- High profile subsidence claims have resulted in the mobilising of local tree protestor groups against tree removal such as Extinction Rebellion.
As a result, insurers are facing increasing issues:
- Intensifying barriers to tree removal
- FOS decisions favouring underpinning over tree removal or other alternatives
- Media Interest in mass egregious tree felling
- Local authorities under pressure to retain trees; favouring reduction of the tree over removal
- Increased lifecycles for customers where the cause of the subsidence is not resolved to allow repairs to be completed.
In 2022, the insurance industry paid out £219m on subsidence claims during the surge event.
It is worth noting that 85% of subsidence claims involve trees owned/controlled by local authorities. Recent statistics show that out of 39,924 trees removed by local authorities in the last 5 years, only 5% were felled as a result of a subsidence claim. The remainder were removed due to planning requirements or health and safety.
Climate change
Subsidence and its link to climate change is gaining increasing prominence as an issue in both the mainstream and alternative media. Removing trees to prevent tree root induced clay shrinkage subsidence has resulted in adverse media exposure from organised groups such as Extinction Rebellion joining with influential community members.
This is a complex issue, and insurers must ensure that their voice, and more importantly, the voice of their customers, is heard and understood. As we navigate a world where climate change increasingly impacts urban environments, insurers play a crucial role in mitigating these evolving risks. It is essential key stakeholder work together to ensure a holistic and balanced approach.
Author: Lindsay Abley
