UK: From 9% to 95% insurable households against floods

It is estimated that about 5.3 million households in the UK are at the risk of flooding. The resulted costs from this highly damaging natural hazard have made UK insurers unable to take the risk of vulnerable households without significant losses or without charging a very expensive insurance premium. There is a solution to this problem and it comes from Flood Re.

Flood Re is a UK temporary re-insurance scheme, functioning as a joint initiative between the UK insurance industry and the UK Government, aiming to make household insurance available and more affordable for those at the risk of flood. Flood Re is able to subsidize premiums and excesses to improve the availability and affordability of flood cover to householders in high flood risk areas thanks to a levy paid by the insurance industry.

Flood Re Scheme was established by Water Act 2014 and was designed to function for 25 years, up until 2039, when it is considered that household insurance will become affordable for almost anyone in UK. Flood Re is functioning since April 2016 and in just two years it has changed the way UK insurance industry handles flooding risk.




95% of households have access to at least 5 quotes

  • In 2016, only 9% of householders who had made previous flood claims could get quotes from two or more insurers, with none being able to get quotes from five or more. Now, 95% of those households have access to five or more quotes, and 81% of previous flood claimants can get ten or more quotes.


4 out of 5 households with previous flood claims received quotes slashed by half

  • Independent research in January 2018, showed that following the introduction of the scheme, four out of five householders with a prior flood claim experienced price reductions of more than 50%. 100% of these households could get quotes from at least two insurers. Flood Re scheme enables insurers to cede policies to the scheme, for which they pay Flood Re a below-market rate premium - meaning the insurer can offer the householder a lower price.


90% of UK insurance market is signed up to Flood Re

  • After the first two years of Flood Re existence, over 60 insurers were signed up to the scheme, covering 90% of the home insurance market. Over 80% of the market is available to customers, whether via direct insurers, affinity partnerships, brokers or software houses, and this number is continuing to grow.


Over 200,000 UK properties benefited from Flood Re so far

  • By the end of Flood Re second year, over 150,000 policies had been ceded to Flood Re. Due to the dynamic nature of the scheme and the competitive nature of the home insurance market, over 200,000 properties in total have benefited from the Flood Re scheme since its inception.


Flood Re set itself 12 areas where the scheme needs to change things. Some of these objectives include limiting the risks of flooding, reducing the costs of flooding, promoting a competitive insurance market and understanding the limits of affordability.

In the context of climate change, flooding events are likely to be seen more often.


Flood Re July 2018 report can be found here:



Source: Oxera, Flood Re



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