Workshop A4: To price flood risk-reflective or not? A key question facing the insurance industry and government
UK flood insurance is currently based on risk-reflective pricing mechanisms, with highest risk homes subsidised through Flood Re. The current Flood Re solution provides affordable residential flood cover, supported by levies on home insurers.
Flood Re ceases operating in 2039, after which all homes currently subsidised are likely to revert to risk-reflective pricing, becoming unaffordable for many. While risk-reflective pricing and the current Flood Re solution both have their drawbacks, there are other options.
This session examines strengths and weaknesses of 2 insurance pricing extremes – fixed tariff and fully risk-reflective – along with the current Flood Re solution. It also considers how flood insurance pricing operates in different markets around the world, including issues such as the:
availability, affordability, and take-up of flood insurance extent to which the insurance industry can incentivise flood risk mitigation public’s perception of flood risk and insurance given the backdrop of climate change and increased frequency of extreme events.
Speakers:
Richard Stock, Hymans Robertson
Laura Evans, Flood Re
Marcus Schofield, Marcuson Consulting
