Scheme to set up an advisory body for the transition
Flood Re has published its first plan for how the flood insurance market should look when it ceases to operate in 2039.
The plan, published ahead of the affordable flood insurance scheme’s launch in April this year, sets out how Flood Re will work with partners to enable lower prices and excesses to be offered to consumers after the scheme itself comes to an end.
Flood Re plans to support its partners by providing detailed evidence showing:
- How the data it collects on the cost of flood claims can be used by insurers and others to cut the cost of repairs
- Where it believes spending and incentives would be most effective in cutting the cost of flooding
- How it may be possible in due course to incentivise householders and insurers to take the most effective measures to protect homes against flooding while remaining firmly on the side of the people affected
Flood Re said the three combined elements will allow informed decisions to be taken on the most effective ways to reduce the cost of flooding, and therefore insurance.
The plan does not describe comprehensively how Flood Re will reduce the scheme’s subsidy because the evidence required to plan for transition does not exist yet.
To create the evidence base Flood Re said it will listen to a wide range of stakeholders by setting up a transition plan advisory body with relevant experts.
The next plan will report back on the advisory body’s work and will be published in time to inform the first of Flood Re’s five year reviews.
Flood Re chief executive Brendan McCafferty said: “Flood Re has an important role in ensuring any action is taken on solid evidence. However, as Flood Re has limited powers, we rely on developing strong relationships with the government, government agencies, insurers, consumer groups and others to ensure that they take the necessary action to reduce the cost of flooding.
“This transition plan is important because it is the first time we have been clear about what the market should look like when we end in 2039.”