UK floods swamp insurance firm

Shares in insurance giant Legal & General sank today after the company warned it was facing millions of pounds in costs linked to recent flooding which has wreaked havoc across the UK.

Legal said it was already facing a bill of £40m (€59m) from flooding in June and, while the impact of the current severe flooding had not been fully assessed, it said the fresh deluge affecting large areas of the south of England could add a further £30m (€44m) in costs.

The estimate comes after a report by ratings agency Fitch Ratings said earlier this week that the total cost of flooding in the UK this summer could cost the insurance industry a total of £3bn (€4.4bn) and push premiums paid by consumers higher.

Shares in the company plunged more than 6%, wiping £600m (€894m) from the firm’s value, as it also warned it was facing a challenges in other insurance sectors.

Legal & General shares fell 10p to 140.5p as the company also announced a 7.5% hike in its interim dividend to 1.87p.