The mutual reinsurer has also given an update on the uptake of its Build Back Better scheme
Flood Re grew its gross written premium (GWP) in the last financial year following a rise in the number of policies it backed, a statement released today (19 July 2023) said.
The mutual reinsurer revealed that the amount of policies ceded to it increased by 3.6% to 265,826 in the year to 31 March 2023, with GWP rising from £46m to £52m year-on-year.
This was despite a drop in its profit before tax, with the firm securing £110m compared to £132m the previous year.
This was mainly driven by a planned reduction in income raised from the levy on insurers of 25% to £135m.
Despite this, Flood Re increased its investment income to £14m for the financial year, compared to £300,000 in the preceding year.
Meanwhile, Flood Re also revealed that 63% of the UK insurance market had committed to offering its Build Back Better scheme as an option for customers.
The scheme, which was launched in April 2022, offers householders the opportunity to install property flood resilience measures up to the value of £10,000 when repairing their properties after a flood.
However, Flood Re warned that more investment in – and education around – adaptation to climate change was needed if the insurance market is to continue to be able to provide affordable flood insurance against a background of increased flooding risk.
It said that an estimated 2m homes could become uninsurable in 30 years’ time without action to protect the UK’s housing stock.
As a result, it urged the government, insurers and consumers to “fully embrace” flood resilience and resistance and continue to invest in flood defences and water management.
Flood Re chief executive Andy Bord said: “With over two million people across the UK already exposed to frequent flooding and the average cost of repairing a flooded home being in excess of £30,000, the time for action on adaptation to climate change is now.
“Whilst government remains committed to investing in flood defences there needs to be as much focus, if not more, on driving forward adaptation.
“Build Back Better has laid the groundwork for increased PFR take-up, with the potential to dramatically enhance property and community flood resilience and reduce costs.
“To fully realise its potential, we would like to see Build Back Better offered as standard in all home insurance policies for those living at high flood risk.”
Meanwhile, Flood Re also confirmed that chairman Mark Hoban will step down in September.
Hoban has chaired the mutual reinsurer since its inception and helped steer its creation, authorisation and establishment.
“I must take this opportunity to personally thank Mark Hoban for his chairing of the Scheme since its inception,” Bord said.
“Under his guidance Flood Re, a world-first, has flourished and succeeded in its mission to improve the affordability and availability of insurance for homes susceptible to flooding.
“This success, I am sure, will continue due to the hard-work and talent of the Flood Re team to whom I am incredibly grateful.”
Hoban added that he had been “struck” by what Flood Re has achieved since it was formed in 2016.
“I would like to thank all my colleagues at Flood Re, both past and present, for their dedication and hard work,” he said.
“I know from talking to householders who have benefitted from the scheme that together we have made a real difference to the lives of so many. I am proud to have been the first chair of Flood Re and wish everyone continued success in the future.”