Flood Re has said the UK must accelerate flood resilience efforts if the market is to transition smoothly to risk-based pricing when the scheme ends in 2039.
The comments follow a recent analysis published in The Conversation by academics from Loughborough University, the University of Leicester and Newcastle University, which questioned whether the UK is adapting quickly enough to rising climate exposure. The researchers argued that while Flood Re has stabilised affordability, it is effectively buying time, and that measurable reductions in underlying risk are essential before the scheme winds down.
Projections cited in the analysis suggest that by 2050, around eight million properties in England could face some level of flood risk. Concerns were also raised around ageing flood defences, surface water pressures and development in higher-risk areas.
Flood Re said its first decade has demonstrated that affordability and availability can coexist.
“Flood Re has proven in its first 10 years of existence that it is possible for household flood insurance to be both affordable and available,” said Kelly Ostler-Coyle, director of corporate affairs at Flood Re.
However, she added that maintaining those conditions beyond 2039 will require broader structural change.
“For this to remain true after Flood Re exits the market in 2039, the UK must adapt and learn to live better with water and be more climate resilient,” she said.
The academic paper suggested that the long-term success of the transition depends on coordinated action between government, insurers and households.
Ostler-Coyle echoed that position. “The challenge cannot be underestimated,” she said. “Improving resilience entails Government, insurers, local authorities, water companies and households to all play their part.”
She pointed to the need for stronger planning decisions, improved building standards and greater adoption of property flood resilience measures both inside and outside homes.
“It is not easy, but it is possible,” she said. “And improving resilience to flood is a win-win. It means that any future damage caused by flooding is far less severe, enables people to spend less time out of their properties, for repairs to be quicker, easier, and cheaper and for trauma to be reduced.”
For brokers and underwriters, the emphasis shifts from premium support to exposure reduction. Property-level mitigation, planning discipline and defence investment are expected to influence how sustainable risk-based pricing proves once Flood Re exits.
The US National Flood Insurance Program has faced recurring financial pressure following extreme weather losses, while France’s CAT-NAT recently increased its national surcharge to address rising catastrophe costs.
Unlike those schemes, Flood Re has a fixed end date. “If the UK can embrace the necessary changes and improve resilience to flood at both the individual property and community level, that will help keep insurance costs down and facilitate a potentially smooth transition to risk-based flood insurance in 2039,” Ostler-Coyle said.
With 2039 set in legislation, attention is increasingly turning to whether risk reduction can move at sufficient pace to support the transition.
