On the 1st October 2018, FloodRe announced that from the 1st January 2019, they will be reducing the levy they charge to insurance companies. It is believed the upcoming reduction will result in a reduction in the cost of flood insurance cover for those living in areas of the UK that have a significant risk of flooding.
To help make insurance policies more affordable, FloodRe was set up as a joint initiative between the government and insurers. This was to make reinsurance for flood risk available to insurers that underwrite the insurance policies for homes in the UK. The cost of reinsurance is set according to the council tax band of a property and provides a subsidy to the premium associated with properties that have a significant risk of flooding. To meet the costs of this subsidy, a levy is paid by insurers. The levy allows FloodRe to purchase reinsurance and build up funds during quiet periods so that it can withstand a large loss from time to time.
A potential reduction in insurance costs for households in flood-prone areas
