A lack of claims allows Flood Re to build reserves
Relatively benign weather since the 2016 launch of Flood Re has allowed the UK government-backed scheme to build up reserves since its launch on the back of some 127,326 policies that have benefited from being backed by Flood Re.
Flood Re made a pre-tax profit of £130 million for the year having collected £180 million levy income and a gross written premium of £28 million. Its operating and administrative expenses were £15.7 million. Flood Re’s invested and liquid assets were £157 million and its net assets (IFRS) were £98 million.
Andy Bord, chief executive of Flood Re, said: “We’re encouraged by the number of policies that we have backed since launch and the significant increase in both affordability and availability of flood insurance.
“Additionally, Flood Re’s profitability demonstrates careful management of the Scheme and will allow us to build up its reserves for future flooding events and reduces the likelihood of having to call an additional levy. Although there have not been any events on the scale of the 2015-16 winter flooding since Flood Re’s launch, we remain ready for the future.”
Recent research showed that since the introduction of the scheme, four out of five householders with previous flood claims saw a reduction in the price of available quotes of more than 50 percent.
They also revealed that, before the introduction of Flood Re, only 9 percent of householders who had made prior flood claims could get quotes from two or more insurers, with none being able to get quotes from five or more.
Now, 95 percent of those households that had previously made flood claims have access to two or more quotes and 84 percent can get quotes from five or more insurance providers.
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