Brought to you by:

Major reinsurers back UK’s $4.3 billion flood pool

The UK Government has secured £2.1 billion ($4.3 billion) in cover for its flood reinsurance pool, with Munich Re and Swiss Re among the key supporters.

The Flood Re program is one of the five largest natural peril reinsurance deals struck globally, and the second-biggest in Europe.

“Securing [so much] in annual protection is an important milestone towards Flood Re being ready to accept policies for flood-risk households,” CEO Brendan McCafferty said.

“The reinsurance program has been significantly oversubscribed and we are pleased by the strong demand from the reinsurance market.”

Munich Re and Swiss Re are the major contributors to the first phase of the pool’s £1.29 billion ($2.6 billion) placement, and 38 parties have secured a share of the second placement of £720 million ($1.5 billion).

Flood Re is a collaboration between the insurance industry and the Government to provide affordable cover for up to 500,000 properties in high-risk areas.

A levy of about £10.50 ($21.40) will be imposed on all UK household premiums to subsidise the scheme.

Systems are being tested to ensure the cover will be launched in April, as planned.