The property sector is seeing some significant premium increases and unfortunately, these are likely to continue.

Your renewal price will have increased from last year, and this is a reflection of the property market as a whole, rather than a decision made by our blocks of flats insurance team. Hopefully, our two-part blog will help to explain why your premium has risen.

The premium increase is mainly attributed to the following two factors:

  1. Claims inflation
  2. Index linking

Part 1 looks at claims inflation, to read how your premium is influenced by index linking in part 2, please click here

1. Claims inflation

Claims inflation is the change in the average price of goods/materials and services in relation to a portfolio of claims. Over the last few years various factors have combined to drive up claims’ inflation, such as:


  • Supply chain disruption
  • Skill shortages
  • Regulatory changes
  • Supply chain disruption
  • Low UK unemployment leading to higher salaries
  • EU nationals returning home
  • 6% increase in minimum wage
Global supply chain issues
  • Record highs in the cost of fuel
  • Freight shipping costs have doubled
  • Travel and transport restrictions
  • Longer lead times on machinery and plant
Climate change and technology
  • Increased storm and flood frequency and severity
  • Inadequate investment in UK drainage
  • Shift to renewables

So, how do the above factors impact property insurance claims and your premium we hear you ask:

  • Material price index for ‘All work’ increased by 24.5% in October 2021 compared to October 2020
  • Imports of construction materials increased by €532 million in Q3 2021 compared to the previous quarter
  • Delays in repairs and replacements due to labour and material shortages make it difficult to contain the cost of claims
  • Delays and a lack of skilled labour required for construction, alteration and repair buildings
Global supply chain issues
  • Costs of fuel and shipping costs will increase manufacturing and supply costs, causing material shortages
  • Transportation costs area key part of a repair and replacement contract
Climate change and technology
  • Flood Re estimates that flooding will increase between 25-80% by 2050 depending on the global temperature increase, this increase in frequency causes a rise in cost of property claims
  • Modern, greener buildings often cost more to repair
How can Lansdown help to limit the effects of this on you?

We’re an insurance broker, not an insurance company, which means we are not bound by any one insurer. If we feel that prices aren’t fair or truly representative of the risk, we will review the market to ensure we are offering you a comprehensive policy at a competitive price.

Our in-house claims team have years of experience and work hard to protect our clients’ best interests, particularly if we feel their claim has been unfairly dealt with or they’re not receiving the claims settlement they’re entitled to. Should the worst happen, our team will be on-hand to support you through the whole claims process, whether you need to make a blocks of flats insurance claim or other.

About Lansdown

Lansdown Insurance Brokers are specialists in Block of flats insurancePersonal insurance and Business insurance. We are able to provide flexible policies to suit individual client needs and provide advice on what cover is needed. For more information call the team on 01242 524498.

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