Aidan Kerr, Director of Operations at Flood Re, at Ambiental’s Flood Re Business Breakfast for Insurers and Reinsurers
In the penultimate of a series of blogs following Ambiental’s breakfast event for insurers and reinsurers, we take a look at Flood Re itself, and find out what the introduction of the reinsurance pool will mean for UK flood risk analysts and insurers.
When it comes to flood risk, one factor is becoming increasingly undeniable; climate change. Sea levels are rising, and the risk of coastal flooding is increasing; the frequency and severity of rainstorms is set to increase, highlighted perhaps by the recent spate of storms and flood events across Northern England, and the risk of inland flooding will only grow in the years to come. Without investment, it is suggested that 500,000 more properties across the UK will be at ‘significant’ risk of flooding by 2035, and thousands of homes may be rejected as uninsurable.
But what can be done about it?
The introduction of Flood Re in April 2016 is the answer to the long-standing problem of available, and affordable, flood insurance in the UK for those homeowners in high flood risk areas. The scheme is likely to benefit half a million households, and will be owned and operated by the insurance industry, and regulated by the UK government in much the same way as other reinsurance bodies are. From the customer’s point of view, the introduction of Flood Re will be a smooth transition, with no change in customer experience at point of sale or during the claims process, and insurance will continue to be purchased as usual.
Speaking after the breakfast event, Flood Re’s Director of Operations Aidan Kerr said “We estimate that between 300,000 and 500,000 properties could benefit from Flood Re, and Flood Re is in there for 25 years, so it will really be a massive solution to one of the biggest consumer issues facing home insurance customers in the UK.”
He also highlighted climate change as one of the main challenges facing the insurance industry, adding, “Flood Re can’t stop flooding, but it can provide piece of mind for those affected. Following the flooding across Cumbria and Lancashire, 5,000 homeowners will be concerned about how they are going to get an insurance renewal, and how affordable that will be.
Flood Re is an operation, and as long as all the insurance industry is signed up for it, then that will become one less worry for all the people who are now mopping out their properties, and trying to save their position to make a claim. Flood Re will make the problem of finding affordable home insurance a thing of the past for people at risk of flooding.”