Flood Re, the UK’s government-backed reinsurance scheme, has commenced the process of finding a new retrocessional reinsurance broker to support the company over the coming three to six years.
Eligible brokers have been asked to submit an application by January 23, 2020, with the new contract set to begin on July 1, 2020.
Flood Re is a not-for-profit reinsurer owned and managed by the re/insurance industry that aims to provide affordable flood insurance for households in the UK.
The company’s operating model involves outsourcing much of its operational and commercial functionality, with a broker appointed to handle a number of these functions.
In particular, broker activities include the selection, negotiation, agreement, and administration of Flood Re’s retrocessional reinsurance protection.
A contract for this retro broking position has been in place since January 2015 and is set to expire at the end of June 2020.
Flood Re disclosed that the approximate annual value of the new contract is £850,000 – £1,500,000 with a possible total value of the contract between £5,000,000 to £10,000,00.
As part of its responsibilities, the successful broker applicant will be required to analyse Flood Re’s portfolio and propose appropriate reinsurance structures, including Alternative Risk Transfer (ART) solutions.
It will also be expected to place the agreed reinsurance program in accordance with regulations and to manage the procurement process, including the production of all relevant underwriting information, negotiation of terms, identification of market opportunities, risk management, and the provision and maintenance of contract wordings.
In addition, the broker will manage the payment of premium for the program, the creation of bordereaux, as well as the analysis and management of claims and the collection of recoveries.
Flood Re is also looking for a candidate that will be able to support it in marketing and promote its reinsurance program to reinsurers, and one that can provide these reinsurers with flood risk catastrophe modelling capabilities.
On the modelling side, the broker will further engage in stress tests to validate Flood Re’s internal models, and will carry out other research and development exercises to enhance these models.