In the News
UK’s Flood Re to Seek OK
to Push Property Resilience
The strategy will lower the toll of future floods and foster the development of anti-flood products.
- Robert O’Connor
- August 2019
As part of its “build back better” post-flood strategy, U.K. residential mutual flood reinsurer Flood Re Ltd. said it is seeking government approval to offer financial incentives to homeowners who make their properties resilient against flooding.
Noting its own formation as a vehicle created to make it easier for homeowners in flood-prone areas to obtain affordable insurance, Flood Re in a statement cited its mandate to look closely at its mission at least every five years. This, the reinsurer said, is what is known as a “the quinquennial review.”
The build back better post-flood strategy is based on the idea that the repairs should enable a property to withstand a subsequent event.
In addition to offering incentives to homeowners to protect their properties, Flood Re said, its latest moves will offer support to the primary insurance sector, lower the toll of future floods and foster the development of anti-flood products.
The proposals, which will require parliamentary approval, have been sent to Michael Gove, the government's secretary for environment, food and rural affairs.
In its recent annual report for 2018/19, Flood Re said it has benefited almost 250,000 properties in its three years of existence. Flood Re added that four-fifths of U.K. householders with previous flood claims had been able to obtain premiums reductions of over 50%. In the report, the reinsurer said 64 insurers, representing 94% of the U.K. insurance market, cede policies to Flood Re.
“The ultimate result that we're thinking to achieve is to make the U.K. housing stock more resilient to flooding,” said Andy Bord, chief executive of Flood Re.
Build back better, Bord said, is based on the idea that the repairs should enable a property to withstand a subsequent event.
Emma Howard Boyd, chair of the U.K. Environment Agency, welcomed Flood Re's move. “This new initiative will help stimulate greater take-up of measures that help people recover more quickly after a flood,” Boyd said in a statement.
The Association of British Insurers has estimated the creation of river barriers and flood defenses is saving the United Kingdom £1.1 billion (US$1.4 billion) annually in flood damage. The disclosure was made at an ABI conference in London in June 2019.
“The human cost of flooding is immeasurable, putting lives at risk, causing families great trauma and pushing some businesses to the brink,” James Dalton, director of general, or nonlife, insurance policy at the ABI, said in a statement.