Flood Re

Insurance and reinsurance industry losses from UK winter storms and the resulting flooding that has been experienced in recent weeks could reach as much as £2.5 billion ($3.7bn), according to analysts at UBS, but the burden for the reinsurance market is uncertain with the hours clause a factor.

Consultancy PwC has raised its estimate for the insurance and reinsurance industry loss from flooding  and damage experienced in the UK from windstorms Desmond and Eva up to £1.2 billion ($1.8 billion), while storm Frank hitting the UK today will raise the toll further.

Estimates of insurance and reinsurance industry losses from the recent UK flooding caused by storms Desmond and Eva are rising, with KPMG suggesting re/insurers should expect a £1.5 billion ($2.23 billion) hit.

A newly launched high-resolution, multi-peril UK flood model from JBA Risk Management, designed to help insurers and reinsurers to work with the governments Flood Re reinsurance facility, could also be applied to help issue a UK flood catastrophe bond.

Flood Re, the UK’s government backed reinsurance scheme to help make flood insurance more accessible to property owners, has secured its first tranche of retrocession, securing £1.29 billion of cover from six traditional counterparties.

The UK’s new government backed reinsurance scheme, Flood Re, is planning to buy £2.1 billion ($3.27 billion) of retrocessional reinsurance cover, which is likely to include collateralised or ILS markets, adding another welcome source of new demand for capacity.

The UK government’s planned state-backed flood reinsurance pool, Flood Re, has published a tender for retrocessional reinsurance broker services, detailing that it is open to alternative risk transfer or alternative (capital) market solutions.

The UK’s planned state-backed flood reinsurance pool, Flood Re, could leave UK insurance companies more exposed than before as the facility relies on the government keeping its promises on flood defenses and could raise exposure to climate change, said S&P.