Flood Re has published its annual results for the financial year ending March 31, highlighting a record increase in policy uptake alongside growing financial pressures from climate-driven risk.
The reinsurance scheme recorded 346,200 policies ceded in 2024/25. This marks a 20% increase from the previous year and represents the highest number since the scheme’s inception. In its tenth year of operation, Flood Re has now helped more than 660,000 UK households obtain flood insurance cover.
The increased uptake has coincided with a shift in the scheme’s risk profile. The cost of global reinsurance has risen, with Flood Re experiencing a greater number of high-value claims, including several exceeding £100,000 and some surpassing £1 million.
The scheme’s annual reinsurance spend has risen by £100 million, and the volume of risk retained by Flood Re has nearly tripled under the latest reinsurance programme. For the 2025–2028 cycle, net retention stands at £347 million, up from £130 million under the 2022–2025 programme.
For the reporting period, Flood Re posted a profit before tax of £13.5 million and paid out £159.6 million in claims. Although the figure is above the historical average, it is a decrease from 2023/24 levels. The scheme’s Solvency Capital Ratio was 235%. To accommodate the increasing risk environment, the reinsurance liability limit has been increased to £3.2 billion.
In March, the scheme also launched its first catastrophe bond, Vision 2039, which secured £140 million in fully collateralised UK flood reinsurance cover.
The bond was issued through the London Bridge 2 insurance-linked securities (ILS) platform, a Lloyd’s of London structure designed to attract alternative capital into the UK reinsurance market.
Flood Re has introduced several measures to support financial stability. A new three-year funding arrangement was also agreed with the government, raising Levy I from £135 million to £160 million. In a first for the scheme, a mid-year premium adjustment will be implemented from October 1, 2025. Additionally, the statutory loss limit has been increased from £100 million to £250 million.
CEO Perry Thomas said the conditions Flood Re was originally designed for – marked by stable weather, lower claims and predictable reinsurance – are changing.
“Climate change has reshaped the risk environment, driving up costs and amplifying our exposure. In response, we must urgently consider how the Scheme itself needs to evolve. This includes revisiting how it is funded, how premiums are structured and which properties it should cover,” Thomas said.
He added that such discussions are necessary to maintain the availability and affordability of flood insurance in the long term, and that decisive action will be critical to ensure sustainability through to 2039.
In parallel, Flood Re is calling for a comprehensive national approach to strengthen flood resilience in the UK. Government investment of £6.85 billion in flood defences through 2029 is a key part of this, along with household-level measures.
More than 70% of the residential insurance market now offers the Build Back Better scheme, which allows flood-affected households to access up to £10,000 in resilience funding. The Flood Performance Certificate roadmap, recently launched, aims to support property-level risk awareness and adaptation.
Flood Re has also continued its collaboration with Defra, the Flood Resilience Taskforce, and the Bonfield Review into Property Flood Resilience to align physical mitigation with insurance support.
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