Enabling available and affordable flood insurance for homeowners

In recent years, floods in the United Kingdom (UK) have risen in such frequency and intensity that they are causing unprecedented damage. Given the impact of climate change on northern European winter storms, this trend will likely continue or even become more severe. Accordingly, people living in the flood-prone areas of the UK have increasingly struggled to afford an insurance cover.

In order to address this flood protection gap at a national level, the UK government and the insurance industry created Flood Re, a public-private partnership aimed at providing affordable insurance to homeowners living in areas with higher flood risk.

Flood Re is a national pool designed to manage UK’s flood exposure up to a 200-year return period level.

The costs to run Flood Re are covered by the home insurance industry through a special levy and reinsurance premiums. Insurers can decide whether to cede the flood risk of individual policies to Flood Re. When a policy is ceded, the insurer is charged a fixed premium per policy, based on the council tax band of the home, as opposed to the home's flood exposure.

Flood Re transfers a large portion of the risk to the international reinsurance market, which includes Swiss Re.