The ABI's Fire Safety Reinsurance Facility has been expanded so that participating firms can now cover losses up to £75m.

When it was first launched in April 2024, the facility helped insurers provide £50m of cover for high-risk multi occupancy buildings with fire safety issues.

In its first year, more than 760 buildings were entered into the facility, at a total value of £17.1bn insured. The ABI says that examples of buildings securing insurance when they would otherwise not have had cover – and some evidence of reduced premiums – suggests that the facility is delivering on its objective.

With increased capacity, it is hoped that insurance risks for high-risk buildings undergoing remediation will be easier to place, in turn supporting leaseholders.

Hannah Gurga, director general at the ABI, said: “The tragic fire at Grenfell Tower exposed critical failures in the building safety regime. As a result, insurers had to reassess their understanding of the risk these buildings posed, and leaseholders have shouldered the financial and emotional burden of living in homes that weren’t as safe as they first thought.

“By establishing the Fire Safety Reinsurance Facility, the industry is working to improve capacity in the market for multi-occupancy buildings and, by extension, support leaseholders. Increasing the cover limit to £75m is a significant step and I hope this will mean that more buildings and leaseholders can be supported while remediation work takes place.”

Graeme Trudgill, chief executive at BIBA, added: “Our members have made active use of the new facility over the past twelve months and tell us that it is making a real difference, helping reduce premiums in many cases which brings a direct financial benefit to hard pressed leaseholders.

“It is a great example of industry innovation and collaboration to solve a difficult problem. The additional capacity now available will reduce the need for brokers to arrange facultative excess of loss reinsurance, further helping to bring down the overall cost of the placement.”