Flood Re processed more claims and paid out more during 2019/20 than in its first three years of operation combined.
According to the reinsurer’s 2019/20 annual report, Flood Re incurred claims at a gross cost of £160 million—10 times higher than the previous year
After three relatively dry years, 2019/20 saw the first major storms, Ciara and Dennis, causing widespread flooding across the UK.
Between November 2019 and February 2020, thousands of homes were flooded in South Wales, Northern and Central England and the Scottish Borders.
Flood Re’s annual report points to the global challenge of climate change, focusing on how rising temperatures will impact the number of properties at risk of flooding, and the implications for the reinsurance scheme’s ability to exit the market by 2039.
Highlights in Flood Re’s annual report for 2019/20 include:
- Benefitting more homeowners: the number of policies in 2019/20 (196,638) is 20% higher than 2018/19. More than 300,000 properties have benefitted from the scheme since its launch four years ago
- Delivering availability: 94% of the home insurance market offer the scheme and 98% of homeowners with prior flood claims can now receive quotes from five or more insurers
- Delivering affordability: four out of five households with previous flood claims have seen a price reduction of more than 50%.
- Higher awareness: helped launch the first National Flood Forum Flood Risk Communities’ Charter and supported the Environment Agency’s ‘What the Flood?’ campaign.
- A strong financial position: profit before tax of £61 million (£136 million the year prior), an increase in invested and liquid assets to £487 million (2019/20: £358 million)
- Flood Re has also commented on how best to respond to the unprecedented circumstances caused by the coronavirus (Covid-19) pandemic. Many households affected by flooding have endured further hardships as a result of the pandemic due to delays to building works or increased costs.
Flood Re chief executive Andy Bord emphasised the critical need for any Covid-19 recovery plan to “build back better” and for continued and sustained investment in flood-risk management strategies.
He said: “Flood Re has had a significant impact on the affordability and availability of home insurance with more than 300,000 households in the UK who are at risk of flooding directly benefitting from the scheme. We are helping more families than ever before and are in a strong financial position ready to support those impacted by flooding.”
“This year has been significant in many ways. We have seen the first major flooding events since our launch in 2016 as well as having to adapt to the Covid-19 pandemic. In these unprecedented times, the country must build back better, developing a recovery plan that creates sustainable and resilient foundations for the future.”
“For those at risk of flooding, it is critical that investment in flood mitigation strategies be maintained.”