There’s been a lot of news about flood insurance and flood defences over the last week: here’s a round up.
Firstly, there was good news and bad news in last week’s budget for the insurance industry. First the bad news: insurance premium tax (IPT) is rising by 0.5 per cent to 10 per cent, only a few months after a 3.5 per cent hike. The good news is that this was less than the insurance industry feared – but also that the proceeds from this latest rise will be added to government funds to improve flood defences in the most at-risk areas of the country.
But some people in the insurance industry weren’t happy, particularly as every type of insurance will be hit – even motor insurance. In the home insurance market, there are fears that yet another rise in IPT could put people off from taking out insurance and leave them exposed if something happens.
Meanwhile, we are only a couple of weeks away from the launch of Flood Re, which aims to provide affordable flood insurance for households across the country. But according to reports in the press over the last few days, there are still two issues hanging over its launch: one around regulatory approval, and the other around software for brokers. Who knows whether it will actually go live in April: we wait with bated breath and will of course report back.
Finally, one of the key gripes about Flood Re is that is doesn’t cover small businesses. However, the British Insurance Brokers Association announced last week that it is looking at launching sometime this year a scheme similar to Flood Re for small businesses. That really is good news.