Introduction
Climate change is shifting the geography of UK property risk. Mark Cunningham, Managing Director at PriceHubble UK, and Darrel Welch, Managing Director at MIAC Analytics, have analysed the impact of climate-related perils on property value and insurance exposure. Their study, to be presented in a 24 September webinar, uses asset-level modelling to identify high-risk zones where rebuild costs could exceed property values. The findings challenge conventional reliance on national stress tests and point to urgent action for insurers.
Why climate risk modelling needs more granularity
National climate stress models fail to capture hyper-local variations in risk. As Darrel Welch explained, “There’s limited guidance on how to link climate data to outcomes – we’ve built that into our software.” MIAC’s methodology integrates scenario data and property-level analytics to generate specific, outcome-focused risk profiles.
In the UK, soil elasticity changes driven by temperature and moisture variations are a primary cause of subsidence. This phenomenon, when modelled at property level, exposes clusters of vulnerability invisible to aggregated national data.
Implication: Insurers should integrate asset-level climate risk data into underwriting and portfolio reviews to avoid blind spots in exposure management.
What the data shows about UK property exposure
The study revealed scenarios where concentrated risk could lead to catastrophic financial outcomes. In some portfolios, rebuild costs were projected to exceed the property’s market value within a 20-year horizon. “We discovered a worrying outcome where rebuild costs start to exceed the value of the building,” said Mark Cunningham.
For lenders with long-term exposure, this creates a direct balance sheet threat. For insurers, whose annual renewals mask long-term shifts, it introduces a latent risk that could crystallise suddenly after extreme weather events. Subsidence risk, in particular, is accelerating in frequency, making 100-year event models increasingly unreliable.
Implication: Pricing analysts and risk managers should stress-test portfolios for scenarios where claims costs outpace asset value retention.
The rebuild cost challenge and its implications
Rebuild costs in high-risk areas are rising due to both material inflation and increased damage probability. Mark Cunningham emphasised that when subsidence interacts with declining property values, repairing may become economically unjustifiable.
“Subsidence versus future value versus rebuild cost – that’s the real problem set,” he noted. This convergence is not just a challenge for insurers; institutional landlords, including insurers with build-to-rent portfolios, face the same exposure. In 2024, Aviva was the UK’s largest builder of residential units, underlining the cross-sector relevance of the findings.
Implication: Insurers with property investment arms must apply consistent climate risk modelling to both underwriting and asset management.
Urgency and opportunities for insurers
While some climate risks develop gradually, extreme events can trigger losses years ahead of schedule. “Insurers need to consider this now, not in a few years.” The team is offering a free initial assessment for insurers submitting address data within two months of the webinar.
Implication: Early participation in climate risk assessment can give insurers a competitive advantage in pricing accuracy and regulatory preparedness.
What’s next
The 24 September 2025 webinar will provide case studies, visual data outputs, and practical steps for integrating property-level climate risk modelling.
Extra value for attendees
Those joining the session will have the opportunity to request a free, time-limited analysis of their residential property portfolio to identify areas of heightened subsidence risk.
Sign up to our upcoming webinar with PriceHubble
