Fit for Purpose and Fit for the Future? An Evaluation of the UK’s New Flood Reinsurance Pool


Flood Re is widely hailed as an innovative approach to disaster risk insurance. This article offers a mixed‐methods evaluation of the new pool, asking whether it is “fit for purpose” and “fit for the future.” The investigation considers the roles of the public and private sectors, risk modeling and risk communication, technical underwriting, distributional aspects, and the behavioral implications of Flood Re, particularly with regards to risk reduction and prevention. The article concludes that the new pool is a transitional reinsurance arrangement that supports the private insurance market and secures affordability of flood insurance in the United Kingdom through premium subsidies. However, this approach is likely to come under pressure in the face of rising flood risk as it fails to incentivize flood risk management and risk reduction efforts.

Risk Management and Insurance Review, 2018, Vol. 21, No. 1, 33-72