Flood Re, which is lowering the premiums it charges to insurers in order to bring about a ripple effect for end consumers, has announced the details of its cuts.
Starting January 01 next year, insurers will see a decrease of 12.5% and 33% for buildings and contents, respectively, in reinsurance premiums which are set based on Council Tax bands. The UK scheme said this will mean a reduction of between £44 and £112 for a combined building and contents policy.
“Our purpose is to make flood cover as part of home insurance more affordable and available,” noted Flood Re chief executive Andy Bord. “I am delighted to announce that we will help to make flood cover even more affordable for those most at risk of flooding by reducing our premiums.”
Prior to announcing the cuts, Flood Re consulted with seven major insurers. These firms are responsible for two-thirds of the scheme’s overall distribution.
“Our detailed analysis has found that we can reduce our charges to insurers, while maintaining a strong financial position and remaining able to respond to significant flooding in the future,” explained the CEO. “Flood Re was encouraged to note the results of our consultation, confirmed across the market, that our premium reductions will result in lower premiums for consumers.
“Therefore, if some households in flood-prone parts of the country have previously not taken out home insurance for cost reasons, we hope that this move may encourage them to obtain cover.”
Back in April Flood Re did not increase premiums in line with inflation.