Flood Re, the UK government-supported reinsurance scheme created to improve access to affordable flood insurance for households at higher risk, has set out a series of reforms to mark its tenth year of operation.
The organisation says the changes are intended to keep insurance affordable and workable for the long term while placing greater weight on reducing flood risk and improving resilience across homes in the UK.
As part of the announcement, Flood Re says it will cut the premium it charges insurers for contents-only policies in Council Tax Bands A and B from £52 to £25 from April 2027. Flood Re describes this change as a targeted measure aimed at supporting lower-income households and renters, with the expectation that insurers will pass on the reduced cost to customers.
Flood Re says the package of reforms is designed to shift the scheme further towards those most in need of support, while also responding to rising flood risks and increasing claims costs linked to climate change. The organisation also notes that the scheme is scheduled to end in 2039, meaning the next phase will focus on preparing both insurers and customers for a long-term transition.
Since its launch in 2016, Flood Re states that it has supported more than 742,000 households in accessing affordable flood insurance. The organisation says this has improved financial protection for families in areas exposed to flooding and helped maintain confidence among buyers, lenders and property owners in higher-risk locations.
Flood Re says that recent years have seen rising costs, with repair spending patterns showing that in three of the past four years more has been spent on claims relating to homes in Council Tax Bands G and H, which account for under 4% of UK properties, than on homes in Bands A and B, which make up around 45% of housing stock. The organisation says this has reinforced the need to adjust how support is directed.
The reforms have been developed alongside the Department for Environment, Food and Rural Affairs (Defra), with Flood Re stating that both bodies intend to ensure the scheme evolves to remain fair, focused and financially sustainable. The Government has also indicated it will work with Flood Re and the insurance industry on possible changes to premium structures and claims processes to improve targeting and long-term stability.
Flood Re says a central element of the next stage is a stronger emphasis on property-level resilience. The organisation is working with insurers, lenders and industry partners to develop Flood Performance Certificates, which would provide a recognised measure of how well a property is protected against flooding. Flood Re compares these certificates to Energy Performance Certificates, noting that they are intended to help homeowners understand risk and encourage resilience improvements that could be reflected in insurance pricing.
In addition, Flood Re plans to introduce discounts on insurance premiums for households that hold a Flood Performance Certificate or complete a comparable assessment. The organisation says this is intended to encourage practical steps that reduce vulnerability to flooding.
Flood Re also says it will expand its Build Back Better initiative, which supports households in making improvements during flood repairs. The scheme can provide up to £10,000 towards measures that increase resilience when homes are restored after flooding. Flood Re adds that it is encouraging wider participation from insurers in offering this approach, and that where it is not offered, adjustments will be made to claims caps within the scheme.
Bridget Rosewell, Chair of Flood Re, commented: “For ten years, Flood Re has helped ensure that households at greatest risk of flooding can access affordable insurance and the peace of mind that comes with it. That is an achievement everyone involved in the scheme can be proud of.
“As we look ahead, it is vital that support remains focused on those who need it most. That is why we are announcing today that we will more than halve the premium we charge for contents-only policies in Council Tax Bands A and B – helping reduce costs for lower-income households and renters, while ensuring protection remains accessible.
“At the same time, climate change means we must go further than affordability alone. Through measures such as Flood Performance Certificates and Build Back Better, we are helping households become more resilient before flooding happens – supporting a stronger, more sustainable flood insurance market for the future.”
Floods Minister Emma Hardy MP added: “Flooding is truly devastating, turning lives upside down and leaving families facing enormous uncertainty – making access to affordable insurance even more vital.
“Over the past decade, Flood Re has transformed that access. Before, many faced unaffordable premiums or could not secure insurance at all, but thanks to this initiative access is now universal, even in the highest-risk areas.
“Under these new reforms, this government is working with Flood Re and industry to further evolve our approach. By reducing premiums and making wider changes we will ensure that, in its second decade, the scheme is better targeted to support fairness and ensure more low-income households get the support they need.”
Dame Amanda Blanc, Group Chief Executive of Aviva, said: “I’m pleased Flood Re has agreed to lower premiums for contents insurance for households in Council Tax bands A and B, which was a key recommendation in the Independent Review of Flood Insurance that I carried out for the Government in 2020.
“Reducing premiums for contents-only cover in these bands will help improve affordability and allow lower income households in high-risk flood areas to access the vital protection that insurance brings.”
Graham Brogden MBE, on behalf of the International Property Flood Resilience Association (IPFRA), noted: “It is encouraging to see a stronger focus on making flood insurance more affordable for those on the lowest incomes, who are often the most exposed to flood risk. Reducing costs for these households, alongside investment in practical resilience measures, is an important step forward.
“The commitment to pilot Flood Performance Certificates is particularly welcome, helping to recognise and incentivise action to improve property-level resilience. Bringing together affordability and resilience in this way is vital to creating a more sustainable approach to managing flood risk in the years ahead.”
