The UK’s Fire Safety Reinsurance Facility has increased its coverage limit to £75 million, following its first full year of operation.
The expansion, backed by participating insurers and developed by McGill and Partners, is intended to address demand for greater protection in the multi-occupancy residential buildings market where fire safety concerns remain a barrier to insurance access.
The Facility was introduced in April 2024 with an initial cover limit of £50 million. It was designed to help insurers provide capacity for high-risk residential buildings with unresolved fire safety issues, many of which had difficulty securing adequate coverage.
After the first year of implementation, participating insurers noted that it identified additional buildings that met the Facility’s criteria but required higher limits. In response, the cover threshold was increased to £75 million.
The Facility is intended to operate for a period of three to five years, aligning with expected timelines for completing safety remediation work across thousands of residential buildings in the UK.
Its duration is structured to act as a transitional measure, providing insurance market stability while longer-term solutions take effect through government-backed programs and private sector initiatives.
In its first 12 months, more than 760 buildings were entered into the Facility, with a combined insured value of £17.1 billion. The data suggests that the Facility has enabled insurance access for properties that might otherwise have been uninsurable and has, in some cases, contributed to lower premiums.
Its backers also state that these developments indicate progress in expanding capacity within this segment of the insurance market.
Hannah Gurga (pictured above), director general of the Association of British Insurers (ABI), said the Facility addresses risks brought to public attention following the Grenfell Tower fire.
“By establishing the Fire Safety Reinsurance Facility, the industry is working to improve capacity in the market for multi-occupancy buildings and, by extension, support leaseholders,” she said. “Increasing the cover limit to £75 million is a significant step and I hope this will mean that more buildings and leaseholders can be supported while remediation work takes place.”
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