Flood Re is to lower the premiums it charges insurers for the first time starting in 2019, according to the company’s annual report.
“After two years of operations, we are pleased that the Scheme’s objective, of ensuring the availability of affordable home insurance for people in flood-prone parts of the UK, continues to be met,” said Andy Bord, Chief Executive Officer (CEO) of Flood Re.
Flood Re has already commenced the process of reviewing premiums and will conclude by the end of September 2018.
The London-headquartered firm is considering a range of different reductions in the level of premiums for buildings and contents policies in order to optimise the benefits of the Scheme.
“Our careful management of the Scheme means that we have built up good reserves and so are well-placed to respond to any future flooding events,” explained Bord.
Once the changes are confirmed, insurers will implement the necessary changes to come into operation from 1 January 2019. This announcement comes after Flood Re decided not to pass on the annual increase to premium thresholds in April 2018.
An increase in policies ceded by Flood Re, totalling 150,051 since March 31, has also been reported. Customer Intelligence data showed four out five households with a prior flood claim saw price reductions of more than 50%.
Additionally, pre-tax profits are up from $130 million last year at $134 million, with GWP at £32 million, up from £28 million.
“Our strong position means that we are in a position to reduce the premiums that we charge insurers in 2019. We are therefore consulting with the industry about the right level of reduction, as well as how the cuts should be allocated across buildings and contents policies.”
“In the UK’s competitive home insurance market, we anticipate these premium reductions will be passed on to consumers.”
