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Flood Re launches new world-first proposition

Flood Re launches new world-first proposition | Insurance Business UK

Flood Re launches new world-first proposition

Flood Re, the joint initiative between the UK insurance industry and the UK government to boost flood insurance availability and affordability, has today unveiled its world-first ‘Build Back Better’ proposition to help householders after a flood.

In a Press release, the reinsurance scheme said that, from April, participating home insurers will start offering customers access to reimbursement funds of up to £10,000, over and above work to repair damage and loss caused by a flood. The funds will be used for the installation of flood resilience measures to help the UK become more resilient to the changing climate and enables householders to return to their homes sooner after a flood.

The participating insurers for the ‘Build Back Better’ scheme have been named as:

  • Ageas
  • Aviva
  • NFU Mutual
  • Lloyds Banking Group (Bank of Scotland, Halifax and Lloyds Bank home insurance products)
  • LV= General Insurance

Flood resilience measures

Flood Re outlined several examples of flood resilience measures which include:

  • Raising electrical sockets and white goods away from floor level
  • Installing self-closing air bricks and flood-resistant doors
  • Replacing flooring with waterproof tiling and grout.

The reimbursement costs can also be used to offset the costs of carrying out surveys to understand the flood risk and potential mitigation. Flood Re noted that, when combined with individual actions such as relocating important or sentimental items or documents upstairs during a flood, these changes can help householders mitigate the financial and emotional consequences of recurrent flooding.

Adapting to growing flood risk

The launch of the scheme has been hailed by Flood Re as a vital step in responding to growing climate-related risks by providing a “practical and innovative solution for homeowners and insurers”.

Flood Re highlighted, however, that to truly create a more flood resilient economy, it must be combined with other actions to ensure widespread adaptation. The government is investing a record £5.2 billion in the flood and coastal defence programme in England to better protect a further 336,000 properties and reduce national flood risk by up to 11%. In addition, the government has committed to publishing a Property Flood Resilience (PFR) roadmap at the end of this year to identify the actions government and industry need to take to accelerate the take-up of property flood resilience measures and successfully underpin the budding PFR market.

Commenting on the news, Andy Bord, CEO, Flood Re, emphasised that, since 1998, the UK has seen six of the wettest years on record with 5.2 million homes and businesses at risk of flooding. The trajectory will only continue to worsen without urgent, collective action, he said, and there is no time to waste, so it is critical to encourage and incentivise adaptation among homeowners.

“The insurance industry has an opportunity to show its innovation and responsiveness to consumer need and to make real, tangible change,” he said. “But to do so, we must throw the traditional principles of insurance to one side. This means thinking of future resilience and building back better after a flood, rather than simply returning a property to how it was before.

“It’s hugely encouraging that five insurers have already partnered with us to offer Build Back Better provisions to customers,” he said, “and I am encouraged that, together with insurers soon to join, we will truly make a difference.”

Floods Minister Rebecca Pow also commented on the move and said it is essential to ensure homes are more resilient to extreme weather events. Build Back Better delivers on the Government’s commitment to better protect the country against flooding, and to prepare for it, she said. Making adaptive measures more affordable will help people across the country.

“This builds on our record £5.2 billion investment in flood defences between 2021 and 2027,” she added, “which is better protecting hundreds of thousands of properties from flooding and coastal erosion.”