One Year on: Flood Re succeeds in bringing more choice for flood affected communities
On the anniversary of the scheme’s launch, research shows availability of insurance has substantially improved.
Flood Re is a world first scheme which went live on 4 April 2016 to help those living in areas at risk of flooding to access more affordable flood cover. New independent research, commissioned by the reinsurance scheme, shows that on its first anniversary people who were unable to get flood cover now have much more choice.
Prior to launch, Flood Re commissioned a benchmarking exercise to examine the impact on availability and affordability of flood cover. The research by Consumer Intelligence, a specialist in customer satisfaction and insight in the financial services sector, showed:
- Before the introduction of Flood Re, only 9% of householders who had made prior flood claims could get quotes from two or more insurers, with 0% being able to get quotes from five or more.
- In the scheme’s first month in operation, this number rose dramatically to 68% of these households being able to get quotes from five or more insurers.
- By December 2016, this increased further so that 84% could get quotes from five or more insurers while 95% could get quotes from two or more.
- Currently, 58% of those households that had previously made flood claims now have access to ten or more quotes.
At launch, 16 insurance providers were signed up to the scheme and this has now increased to 60 insurers. They represent 90% of the home insurance market which means that Flood Re has changed the market by enabling consumers in flood-prone parts of the country to have more choice.
Since the introduction of Flood Re, the data shows four out of five householders with previous flood claims saw a reduction in the price of available quotes of more than 50%. One such person was Sue Morris from Sedgeberrow, Worcestershire who has benefitted from a lower premium, seeing a reduction from £1,000 to £400 (60%). Thanks to Flood Re, her excess has also dramatically reduced from £10,000 to £250 (97.5%). Thousands of consumers like Sue have benefitted from the excess level set by Flood Re at £250.
Mark Hoban, Chairman of Flood Re, said: “Flood Re has changed the insurance market so that tens of thousands of households that have been flooded can access more affordable insurance. We are proud that this scheme has been able to help people whose lives have been devastated by flooding. Householders should speak to their current insurer to see if it has signed up to Flood Re and be prepared to shop around to ensure they getting the best possible deal for them”.
Sue Morris said: “The flooding of the Isbourne in July 2007 was the worst in living memory…It was a very frightening time for a lot of people because not only had we suffered all the heartbreak of losing one’s home, then you had the financial kick.
“What I wanted the Flood Re people to be aware of was what a huge difference this was making on the community in this village. Not only have insurance rates dropped from the thousands to the hundreds, one of the factors that was stopping people from buying was that no one would insure them. Flood Re has taken that problem away.”
Flood Re was set up to enable people living in areas at risk of flooding to access affordable flood insurance.