Flo lood Re and the fu future Har arrie iet Bou oughton, Ge - - PowerPoint PPT Presentation

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Flo lood Re and the fu future

Har arrie iet Bou

• ughton, Ge

General l Cou

• unsel

No November 20 2019 19

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Flood Re’s purpose is to promote and enable the avail ilabil ilit ity and affordabil ilit ity of flood insurance for eligible homes and manage over its lifetime the transit itio ion to an affordable market for household flood insurance where prices reflect the risks of flooding

Flood Re – Our Purpose

HIGH FLOOD RISK HOMES FLOOD PREMIUMS (SET BY INSURERS) FLOOD CLAIMS (NET OF EXCESS) INDUSTRY LEVY 1 INDUSTRY LEVY 2 CAPPED INWARDS REINSURANCE PREMIUM FLOOD CLAIMS (NET OF DEDUCTIBLE)

INSURERS How Flood Re Operates

Ensuring future affordability for consumers

• Premiums charged by Flood Re to insurers are set based on Council Tax bands.
• From the start of 2019 they were reduced by 12.5% for buildings and 33% for

contents.

• This will mean a reduction of between £44 and £112 for a combined buildings

and contents policy.

• Over 250,000 homes have benefitted from the Scheme to date.

Scheme success

Financial performance Public purpose Consumer Benefit

£32m

Gross written premium

425%

Solvency capital ratio

£134m

Profit before tax

£180m

Levy income

£257m

Invested and liquid assets

93%

Surveyed with prior flood claims can now receive quotes from five or more insurers

81% surveyed

Can now choose from at least 10 insurers

4 out of 5

Households with previous flood claims have seen a price reduction of more than 50%

150,000

Number of policies

90%

Of the home insurance market

• ffer the scheme

85%

Channel readiness

The Transition Plan

Summary

Substantial progress on Transition

Engaging with communities

QQR – package of proposals

Any Questions?

Appendices

Council Tax band A, B C D E F G H Buildings policy 117 131 148 176 231 296 812 Contents policy 52 66 73 89 100 140 406 Combined policy 169 197 221 265 331 436 1218

All insurers writing UK household business: Levy 1 of £180m p.a. For each policy to be ceded to Flood Re: Ceded risk premium charged to insurers at a fixed price according to council tax bands:

Funding Flood Re

Insurers set retail prices – not Flood Re

Eligible Properties: Flood Re cover

ELIGIBLE PROPERTIES: Insured in the name of individuals Must have a Council tax band (All Council Tax bands covered) Held for residential use Insured on individual basis Occupied by policy holder or immediate family some of the time or unoccupied OUT OF SCOPE: Homes built on or after 01 January 2009 Small businesses (business rated) Buildings cover for leasehold premises 4 or more units