Flood Re has reported record support to UK households as reinsurance costs surge and scheme exposure grows in the face of increasing climate risk, adding that reform will be needed if it is to remain sustainable.

Flood Re has helped more than 660,000 households secure cover to date during its 10 years of operation. Figures published in its latest annual report reveal that in 2024/25, the number of policies ceded to the scheme rose by 20% to 346,200 – the highest on record.

It also says that the global cost of reinsurance is increasing and Flood Re is facing more frequent and severe claims – including a rise in very large claims exceeding £100,000 and some over £1m. The result is that the scheme’s annual reinsurance costs have risen by £100m, whilst the amount of risk that it retains directly has nearly tripled.

Flood Re warns that climate change will mean that further reforms are needed to ensure that the scheme remains sustainable in the long term. Changes that may be required include premium adjustments, reforms to the scheme funding model and the scope of properties covered.

Perry Thomas, CEO of Flood Re, said: “The world Flood Re was designed for – one of predictable weather patterns, modest claims and accessible reinsurance – is rapidly disappearing. Climate change has reshaped the risk environment, driving up costs and amplifying our exposure. In response, we must urgently consider how the scheme itself needs to evolve. This includes revisiting how it is funded, how premiums are structured and which properties it should cover.

“These are complex but essential discussions if we are to preserve the availability and affordability of flood insurance for the long term. Bold action now will be critical to ensuring the scheme’s sustainability through to its planned conclusion in 2039.”