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The Actuary The magazine of the Institute & Faculty of Actuaries

Flood Re receives regulatory approval 

Reinsurance scheme Flood Re has been authorised to operate by the Prudential Regulatory Authority and the Financial Conduct Authority with effect from today.


Flooded road with a drowned car © Shutterstock
Flood Re is a not-for-profit fund designed to offer affordable cover to high-flood-risk households. © Shutterstock

This means the scheme will go live on 4 April as planned. Flood Re has also published a list of participating insurers prior to the launch for customers, with more to be added in the coming months.

James Dalton, director of general insurance policy at the Association of British Insurers, said: “It’s great to see so many insurers ready to make use of Flood Re from launch. Monday is just the start of a process and we know more providers will join them over time, bringing even more choice for people with homes at risk of flooding.”

In February the scheme secured funds required for the programme worth £2.1bn. In the same month, it published its first transition plan, which details how the programme will work with partners.

The scheme is designed to enable insurers to offer lower premiums and excesses to high-flood-risk homes across the UK. It will end in 2039.

Flood Re estimated over time that up to 350,000 homes would benefit as a result of affordable cover. The way people buy their insurance policy and make claims will remain unchanged.

Brendan McCafferty, chief executive of Flood Re, said: “We will be ready to accept policies in April and are working hard to ensure that as many insurers as possible are able to offer products to consumers. After launch, people in high flood risk areas should speak to their insurer and be prepared to shop around.

“Consumers will continue to buy their policy from the insurer they choose and if they need to make a claim then they will do so directly with that company.”