Flood Re continues to shield repeat-claim homeowners from repricing. But for some higher-band properties, successive increases are putting affordability back at the centre of the flood insurance debate.
A wet start to 2026 has sharpened the backdrop. Cornwall recorded its wettest January on record, while parts of Devon, Somerset and South Wales saw rainfall well above long-term averages.
Daniel Bernet, associate director of insurance solutions at Moody’s, said successive extra-tropical cyclones have left soils saturated and river levels elevated.
“Prolonged and heavy rainfall leads to saturated soils, increased river flows and local flooding,” he said. “With the increased wetness and heightened discharge, further precipitation is more likely to cause more flooding.”
The Environment Agency estimates around 4.6 million properties in England are at risk of surface-water flooding, including roughly 1.1 million at high risk.
Liz Mitchell, director of Flood Assist Insurance, said around 95% of her clients sit within Flood Re. “Flood Re is agnostic to the number of flood claims you make,” she said. “You can flood four or five times and it doesn't make any difference.”
Because premiums are tied to council tax band rather than claims history, repeat flooding does not automatically drive repricing inside the scheme.
Outside it, appetite can narrow quickly where a property cannot be ceded to Flood Re.
Mitchell pointed to successive Flood Re premium increases over the past 18 months, including further rises due from April 1 for higher council tax bands.
For a band G home, she said premiums moved from around £560 (excluding IPT) to approximately £720 over just over a year - a rise of roughly 45%.
“If you're talking about a £200-plus rate increase in a fairly flat market, that’s going to create behaviour that’s quite unusual,” she said.
Flood Re has helped more than 660,000 households secure cover, with policies ceded to the scheme rising 20% to 346,200 in 2024/25. But sustained increases raise questions about how far affordability can stretch in higher bands.
“It’s not just affordability; it’s also perception of risk,” Mitchell said. “There’s nothing like a bit of rain to make the phones ring.”
Alison Williams, managing director of Prestige Underwriting, said underwriters are leaning more heavily on hazard and depth intelligence rather than postcode “rules of thumb”.
“A single-event claim is treated differently from repeat claims where vulnerability looks structural,” she said.
For repeat-claim risks, appetite increasingly depends on property-level resilience evidence.
“Well-specified property-level resilience can change expected damage,” she said, highlighting the importance of Flood Re’s Build Back Better initiative.
“The most effective broker conversations are becoming less price-led and more resilience-led, especially where flooding has happened more than once.”
Flood Re is due to end in 2039, with a transition to fully risk-reflective pricing.
Aviva’s Home & Lifestyle Underwriting team said “there needs to be much more progress over the medium-term to provide confidence that a transition to a market without Flood Re will be successful and that affordable flood insurance will be available for all.”
They called for clear transition indicators and a roadmap, including stronger controls on inappropriate floodplain development, wider uptake of property flood resilience measures and sustained investment in both traditional and nature-based defences.
Flooding already costs the UK economy £2.4 billion annually, according to Aviva’s Building Future Communities report, while projections suggest one in four homes could be at risk by mid-century.
Williams said the market is not prepared for a post-Flood Re environment. “In my view, the market is nowhere near prepared for a post-Flood Re environment,” she said. “There is still significant reliance on the existing framework.”
Mitchell similarly questioned whether insurers would absorb the highest-risk properties without a risk-transfer mechanism. “I can't see that it doesn't continue in some guise,” she said.
Flood Re is still stabilising the market. But as exposure rises and premiums edge higher, the industry’s next challenge may not be access to cover, but preserving its affordability.
