Flood Re CEO calls for ‘urgent’ widescale action on rising flood risk
Flood Re has called on government, insurers, and consumers to “fully embrace” flood resilience and resistance and invest in flood defences and water management, warning that an estimated two million homes could become uninsurable in 30 years’ time without action to protect the UK’s housing stock.
Flood Re is the joint initiative between the UK insurance industry and the UK Government to promote the availability and affordability of flood insurance.
The reinsurer has warned that much more investment in, and education around, adaptation to climate change is needed if the insurance market is to continue to be able to provide affordable flood insurance against a background of increased flooding risk.
“Climate change is having and will continue to have a major impact on the UK with river, coastal and surface water flooding all on the rise. With over two million people across the UK already exposed to frequent flooding and the average cost of repairing a flooded home being in excess of £30,000, the time for action on adaptation to climate change is now,” stated Andy Bord (pictured), CEO, Flood Re.
“Whilst government remains committed to investing in flood defences there needs to be as much focus, if not more, on driving forward adaptation,” he added.
Flood Re's Build Back Better scheme, launched in April last year, has gained the support of 63% of the UK’s residential property insurance market. With Flood Re set to exit from the market in 2039, it has emphasised the urgency of implementing measures to ensure a flood resilient future for the UK.
“That is why we launched the Build Back Better Scheme, are driving forward on plans for Flood Performance Certificates and have made the creation of a Centre of Excellence as priorities in our Transition Plan,” Bord said.
“Build Back Better has laid the groundwork for increased PFR take-up, with the potential to dramatically enhance property and community flood resilience and reduce costs. To fully realise its potential, we would like to see Build Back Better offered as standard in all home insurance policies for those living at high flood risk.”
Flood Re delivered over a quarter of a million (265,826) policies backed by the Scheme during the year, an increase of 3.6%, with gross written premiums received rising to £52 million from £46 million in 2022. Eligible own funds under the Solvency II Directive also rose to £693 million, compared with £614 million in the prior year period.
The profit before tax of £110 million for the year to the end of March 2023, compared with £132 million in 2022, reflected a broadly benign year for flood events and a planned reduction in income raised from the Levy on insurers of 25% to £135 million (2022: £180 million), Flood Re said.
Flood Re said it was “successful” at mitigating the impact of inflation. Flood Re increased its investment income to £14 million for the financial year, compared to £0.3 million in the preceding year.
The company announced that Mark Hoban will step down as chair in September after eight and a half years during which he oversaw the creation, authorisation, and establishment of Flood Re. His replacement will be confirmed shortly.
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