Flood Re is a world first scheme which went live on 4 April 2016 to help those living in areas at risk of flooding to access more affordable flood cover. New independent research, commissioned by the reinsurance scheme, shows that on its first anniversary people who were unable to get flood cover now have much more choice.
Prior to launch, FLOOD Re commissioned a benchmarking exercise to examine the impact on availability and affordability of flood cover. The research by Consumer Intelligence, a specialist in customer satisfaction and insight in the financial services sector, showed:
- Before the introduction of Flood Re, only 9% of householders who had made prior flood claims could get quotes from two or more insurers, with 0% being able to get quotes from five or more.
- In the scheme's first month in operation, this number rose dramatically to 68% of these households being able to get quotes from five or more insurers.
- By December 2016, this increased further so that 84% could get quotes from five or more insurers while 95% could get quotes from two or more.
- Currently, 58% of those households that had previously made flood claims now have access to ten or more quotes.
Since the introduction of FLOOD Re, the data shows four out of five householders with previous flood claims saw a reduction in the price of available quotes of more than 50%. One such person was Sue Morris from Sedgeberrow, Worcestershire who has benefitted from a lower premium, seeing a reduction from GBP 1,000 to GBP 400 (60%). Thanks to FLOOD Re, her excess has also dramatically reduced from GBP 10,000 to GBP 250 (97.5%). Thousands of consumers like Sue have benefitted from the excess level set by Flood Re at GBP 250.
Mark Hoban, Chairman of FLOOD Re, said: "FLOOD Re has changed the insurance market so that tens of thousands of households that have been flooded can access more affordable insurance. We are proud that this scheme has been able to help people whose lives have been devastated by flooding. Householders should speak to their current insurer to see if it has signed up to FLOOD Re and be prepared to shop around to ensure they getting the best possible deal for them".
FLOOD Re was set up to enable people living in areas at risk of flooding to access affordable flood insurance. The reinsurer takes the flood risk element of home insurance from an insurer in return for a premium based on the property's Council Tax band. In addition, it charges the insurer an excess of GBP 250 on the flood part of the policy. Because FLOOD Re's activities are subsidised by an annual levy on insurers of a total of GBP 180 million, the premium it charges insurers is below the rates insurers would normally charge on properties at the highest risk of flooding. According FLOOD Re's estimates, over time, around 350,000 households could benefit from the scheme.