The Association of British Insurers (ABI) has commended the significant positive impact of the Fire Safety Reinsurance Facility, one year after its launch.
Created by re/insurance broker McGill and Partners, with support from the ABI and in partnership with the British Insurance Brokers Association, the Facility was established as an industry intervention to improve capacity in the multi-occupancy buildings insurance market.
According to the ABI, in the first nine months, over 680 buildings have been entered into the Facility, with a total sum insured of £14.9 billion.
“This includes examples of high-risk buildings with fire safety issues being able to secure insurance when they otherwise would not have had cover, and evidence of reduced premiums for leaseholders,” the Association explained.
ABI continued, “Before the Facility was launched, most insurers had very little capacity, to provide cover for buildings with fire risk issues that weren’t already on their books.
“The Facility has enabled insurers to increase this capacity, allowing them to provide more cover for buildings they already insured, and insure more buildings as new business.
“This includes buildings which may have previously been uninsured, or were covered elsewhere with higher premiums by another insurer or group of insurers.”
Insurers participating in the Facility in its first year include Allianz, Aviva, Axa, RSA and Zurich.
Steve McGill CBE, Founder & CEO, McGill and Partners, commented, “One year after launching the Fire Safety Reinsurance Facility, it’s incredibly rewarding to see the tangible benefits it has delivered for leaseholders facing insurance challenges due to fire safety risks.
“I’m immensely proud of what our team at McGill and Partners has achieved in improving insurance outcomes, and we remain dedicated to driving further progress in this critical area.”
“As specialists in developing innovative solutions for complex and high-risk scenarios, we will continue working closely with our insurer and reinsurer partners to expand access to affordable, comprehensive cover in our industry.
“In the first year, the Facility has proven itself as a competitive market solution to drive a positive impact, and we are excited to build on its success in the years ahead.”
Hannah Gurga, ABI Director General, added, “The financial and emotional strain that leaseholders have experienced while living in buildings with high fire-risks is something that our industry is very aware of and remains determined to do what it can to address.
“The launch of the Fire Safety Reinsurance Facility last year was the culmination of extensive efforts by McGill and Partners and the wider insurance industry to support those affected, and I’m encouraged to see the progress it has made within its first year.
“The Facility is intended to run for the next two to four years while remediation work takes place, and we hope to see more buildings and leaseholders supported through the Facility during this time.
“We will continue to discuss options with Government on how it could support leaseholders further and welcome their interest in this. It remains the case that remediation to a standard that protects people’s lives as well as their homes is the only long-term solution.”
Graeme Trudgill, Chief Executive at the British Insurance Brokers’ Association, said, “The facility is an excellent example of our industry coming together to support leaseholders living in buildings that require fires safety remediation.
“We now see far fewer cases requiring complex layered reinsurance placements which is a direct effect of the facility bringing new capacity and stimulating competition. We have also seen many case studies sent to us by our members that show significant premium savings of up to 60% once a risk is placed using the facility.
“We continue to work with Government on ideas to accelerate the pace of remediation and we know from experience that our members can negotiate premiums further down once a building is made fire safe.”
