Flo lood Re and the fu future Har arrie iet Bou oughton, Ge General l Cou ounsel No November 20 2019 19 1
Flood Re – Our Purpose 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 2
How Flood Re Operates INDUSTRY LEVY 1 INDUSTRY LEVY 2 FLOOD PREMIUMS (SET BY INSURERS) INSURERS CAPPED INWARDS REINSURANCE FLOOD CLAIMS PREMIUM (NET OF EXCESS) FLOOD CLAIMS HIGH FLOOD (NET OF RISK HOMES DEDUCTIBLE)
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 425% 93% Solvency Surveyed with prior capital ratio £257m flood claims can now receive quotes from Invested and five or more liquid assets insurers £134m 81% Profit before tax surveyed Can now choose from at least 10 insurers Financial Public performance purpose £180m 4 out of 5 Levy income Households with previous flood claims have seen a price reduction of more than 50% Consumer £32m Gross written Benefit premium 150,000 Number of policies 85% Channel 90% readiness Of the home insurance market offer the scheme
The Transition Plan
Summary
Substantial progress on Transition
Engaging with communities
QQR – package of proposals
Any Questions?
Appendices
Funding Flood Re 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 : 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 Insurers set retail prices – not Flood Re
Eligible Properties: Flood Re cover ELIGIBLE OUT OF SCOPE: PROPERTIES: Insured in the name of individuals Homes built on or after Must have a Council tax band 01 January 2009 (All Council Tax bands covered) Small businesses Held for residential use (business rated) Insured on individual basis Buildings cover for leasehold premises 4 or more units Occupied by policy holder or immediate family some of the time or unoccupied
Recommend
More recommend
