Flood Re to reduce reinsurance premiums from 1 January 2019
Flood Re has today announced that it will reduce the reinsurance premiums it charges insurers from the beginning of next year.
This move is anticipated to reduce the cost of home insurance for those in the highest flood risk zones in the UK.
The premiums are set based on Council Tax bands, and from 1 January 2019, the premium for buildings will be reduced by one eighth (12.5%), and one third (33%) for contents.
This could mean a reduction of between £44 and £112 for a combined building and contents policy.
The decision to reduce the premium came after Flood Re consulted with seven of its major insurer partners and analysed more than 6.9m test records.
While the end-price charged to consumers is decided by individual insurers, this analysis anticipated that a reduction in reinsurance premiums would result in reduced prices for consumers.
Andy Bord, chief executive of Flood Re said: “Our purpose is to make flood cover as part of home insurance more affordable and available. I am delighted today to announce that we will help to make flood cover even more affordable for those most at risk of flooding by reducing our premiums.
“Our detailed analysis has found that we can reduce our charges to insurers, whilst maintaining a strong financial position and remaining able to respond to significant flooding in future.
“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. Consumers should always shop around to get the right deal for them.
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