Flood Re, UK insurance industry that promotes the availability and affordability of flood insurance, has reported strong financial and operational performance for the year ending 31 March 2024.
Storms Babet, Ciaran and Henk represent the most material flood events that the Scheme has managed since inception in 2016. The Scheme delivered during these immensely challenging times and proved its resilience.
30% of all claims since Flood Re’s inception were received in 2023/24, in the wake of the winter storms. Around one-third of claims submitted to Flood Re for Storms Babet, Ciaran and Henk included Build Back Better (BBB) provisions, though BBB usage varied significantly amongst insurers, ranging from 4% to 56%. The number of policies ceded to the Scheme increased by 9% to 288,567.
The past year also saw a 2% growth in households that have benefitted from Flood Re cover since April 2016, bringing the total to 560,446. Notably, 99% of high-risk householders are now able to obtain quotes from 15 or more insurers on price comparison sites.
The year under review also saw Flood Re invest £900 million into liquid assets and maintain a 238% operational capital ratio, with a profit before tax of £23.8 million for the year.
Flood Re is committed to ensuring that the Scheme remains sustainable as it approaches its planned exit in 2039. The second Quinquennial Review (QQR), published by Flood Re today, has involved extensive engagement with stakeholders to evaluate and enhance the Scheme’s effectiveness in the current context. Andy Bord, outgoing CEO of Flood Re, said:
“This year, the resilience and effectiveness of the Flood Re Scheme were rigorously tested by severe storms Babet, Ciaran and Henk, marking the most significant flood events since our inception in 2016. We met these challenges head-on and delivered for those most at risk.
During my tenure, we’ve achieved significant milestones, such as enabling over 550,000 households to access affordable home insurance and launching the world-first BBB initiative. However, it’s time for all stakeholders to work harder to improve household resilience – including full insurer support for BBB, , provide better consumer information about flood risk and ensure a smooth transition as Flood Re exits the market in 2039. I am confident that Flood Re will continue to thrive and play a crucial role in managing flood risks and supporting affected communities.”
Stuart Logue, CFO and incoming interim CEO, added:
“This year showcases the resilience of the Flood Re Scheme. We will continue to build on the good work that has been undertaken under Andy’s management, as we look to the next stage of Flood Re’s sustainable progress.”
Bridget Rosewell CBE, Chair of the Board, concluded:
“In my first year as Chair of Flood Re, I am incredibly proud of the Scheme’s response to extremely testing circumstances. The increase in claims this year highlights the critical importance of flood reinsurance, which will only become more significant as climate change progresses. This highlights the urgent need for all stakeholders to intensify efforts ahead of Flood Re’s 2039 exit.”
