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Fit for purpose and fit for the future? An evaluation of the UK’s new flood reinsurance pool

Surminski, Swenja (2018) Fit for purpose and fit for the future? An evaluation of the UK’s new flood reinsurance pool. Risk Management and Insurance Review, 21 (1). pp. 33-72. ISSN 1098-1616

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Identification Number: 10.1111/rmir.12093

Abstract

Flood Re is widely hailed as an innovative approach to disaster risk insurance. This paper 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 modelling and risk communication, technical underwriting, distributional aspects and the behavioural implications of Flood Re, particularly with regards to risk reduction and prevention. The paper concludes that the new pool is a transitional reinsurance arrangement that supports the private insurance market and secures affordability of flood insurance in the UK 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.

Item Type: Article
Official URL: https://doi.org/10.1111/rmir.12093
Additional Information: © 2018 Risk Management and Insurance Review
Divisions: Grantham Research Institute
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Date Deposited: 09 Mar 2018 11:20
Last Modified: 20 Jan 2020 01:17
Projects: ES/K006576/1
Funders: Economic & Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/87106

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