Flood Re, the UK’s flood reinsurance facility, has announced that this year it will freeze the premium prices it charges to insurers when they cede policies to the scheme, instead of imposing its usual annual increase in premium thresholds.
This is the first time Flood Re has suspended premiums increases, as the statute on which the Scheme was established requires that premium thresholds rise alongside the Consumer Price Index (CPI) at the start of each financial year.
Andy Bord, Chief Executive Officer (CEO) of Flood Re, said: “The latest data, from our half-year results, showed a continued improvement in the availability of home insurance for both those with prior flood claims as well as those in ‘at risk’ areas. On affordability, the average premium for those in flood risk areas rose by less than the mass-market average.
“The decision to freeze premiums is an important one, which we have taken after discussions with insurers. Despite recent short-term increases, insurance market premiums have decreased over recent years.
“Flood Re has a strong financial position and we consider it appropriate to freeze premiums which in the UK’s competitive home insurance market, we anticipate, will be passed on to consumers.”
Flood Re caps the premiums it charges to insurers based on the Council Tax bands of the properties covered by a policy.
The company’s half-yearly results, which were released in December 2017, showed slow but steady growth in the number of policies reinsured by Flood Re, currently at 142,000.
