Category: Climate perils · Reviewed by Matt Bartlett, Director · Founder · Last reviewed 2026-06-10
Flood Re is the United Kingdom’s statutory flood reinsurance pool for domestic dwellings, established by the Water Act 2014 and operational from 4 April 2016, designed to maintain the availability and affordability of household flood insurance for properties at high flood risk and to manage an orderly transition to risk-reflective pricing by 2039.
Category: Climate perils Also known as: Flood Re, UK Flood Reinsurance Scheme, Flood Reinsurance pool Typical UK market form: Statutory reinsurance cession with fixed council-tax-banded premiums Related concepts: Flood insurance UK, Property insurance, Reinsurance
Flood Re is a not-for-profit reinsurer authorised and regulated by the Prudential Regulation Authority and the Financial Conduct Authority. It accepts cessions of the flood element of qualifying home insurance policies from participating UK insurers in respect of properties built before 1 January 2009, in exchange for fixed reinsurance premiums set by council tax band. The cession is invisible to the consumer: the policyholder buys a standard buildings and contents policy from a participating insurer, and Flood Re sits behind the scene to bear the flood risk.
The scheme is funded by a statutory levy on all UK home insurers (initially £180 million per year), plus the council-tax-banded reinsurance premiums paid by ceding insurers. Excluded property types include leasehold blocks of more than three flats, purpose-built rental, commercial property, and homes built on or after 1 January 2009 — the cut-off intended to discourage development in floodplain areas.
According to Flood Re’s published annual transition reports, the scheme has handled in excess of half a million policies cumulatively since launch, with claim payments to participating insurers running into hundreds of millions of pounds across major flood events including Storm Desmond (December 2015 — pre-cession events), the winter 2019/2020 floods, Storm Babet (October 2023) and Storm Henk (January 2024). The Environment Agency’s National Flood Risk Assessment (NaFRA2), published December 2024, identifies approximately 6.3 million properties in England as being at risk from rivers, the sea or surface water, of which the domestic dwellings built before 2009 fall within Flood Re’s potential addressable population.
UK Climate Projections 2018 (UKCP18) and the Met Office State of the UK Climate report indicate that flood frequency and severity will continue to increase under all plausible emissions pathways, making the planned exit from the scheme by 2039 a material policy challenge. Flood Re has consistently emphasised that the transition to risk-reflective pricing depends on parallel investment in flood defences and property-level resilience.
The flood element of a qualifying home buildings or contents policy is ceded into Flood Re by the participating insurer. The reinsurance premium is set by the policyholder’s council tax band (with a separate flat premium for Northern Ireland), and Flood Re pays claims on a back-to-back basis with the participating insurer’s policy wording. The policyholder excess for flood claims under a Flood Re-ceded policy is capped at £250 (£250 in the original regulations, indexed in line with the scheme rules).
The Build Back Better scheme, launched on 1 April 2022, allows participating insurers to fund up to £10,000 of property-level flood resilience measures — for example, flood-resistant doors, non-return valves, raised electrical sockets and resilient plaster — within a flood claim settlement, even where the cost is in excess of the like-for-like reinstatement cost. Build Back Better is intended to reduce the cost and disruption of future flood events on the same property and to support the long-term transition to risk-reflective pricing.
Cover provided to the policyholder remains conventional indemnity-basis property insurance; Flood Re does not change the terms on which the consumer is insured beyond setting the maximum flood excess.
Flood Re is established by sections 64 to 70 of the Water Act 2014, with operational rules in the Flood Reinsurance Scheme Regulations 2015 (SI 2015/1902) and funding and administration rules in the Flood Reinsurance (Scheme Funding and Administration) Regulations 2015 (SI 2015/1875). The scheme is required to publish a quinquennial transition plan setting out how the market will move to risk-reflective pricing by the scheduled wind-up date of 2039.
Flood Re superseded the ABI Statement of Principles on Flood Insurance, a voluntary industry agreement that operated from 1 January 2008 until its termination on 30 June 2013. The Statement of Principles required ABI member insurers to continue to offer flood cover to existing customers at high flood risk subject to government investment in flood defences, but was widely regarded as unsustainable as a long-term solution, prompting the legislative basis for Flood Re. The wider statutory context includes the Flood and Water Management Act 2010 (risk management authorities), the Civil Contingencies Act 2004 (emergency response), and the Reservoirs Act 1975 (reservoir safety).
Flood Re does not provide cover for commercial property, leasehold blocks of more than three flats, or properties built after 1 January 2009. Commercial flood risk continues to be priced and underwritten on a free-market basis, with London Market and reinsurance capacity supporting larger or higher-hazard placements. Brokers advising landlord clients on mixed-use buildings, large blocks of flats or post-2009 developments should confirm at the outset whether the policy can or cannot benefit from Flood Re cession, as this affects both the premium and the policyholder’s flood excess.
Businesses with high-risk premises should consider parametric flood layers, property-level resilience investment, and the implications of the post-2039 market for any long-term lease or finance arrangements.
Following Storm Babet in October 2023, Flood Re processed a significant uplift in cession claims from participating insurers across the East Midlands, Yorkshire and eastern Scotland. The event was used by Flood Re in its public communications to illustrate the operational value of the scheme to policyholders in high-risk areas who would otherwise have faced very materially higher premiums.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote