U.K.'s Flood Re opens for business with A- financial rating

Flood Re Ltd., the government-backed household insurance plan for homes in flood risk areas of the United Kingdom, was launched Monday and assigned an A- financial strength rating by Standard & Poor's Corp.

Flood Re enables participating insurers to pass on the flood risk element of homeowners policies.

Flood Re is funded by a levy of £180 million ($256.1 million) a year on U.K. household insurers.

The size of the levy will be reviewed after five years.

The London-based reinsurer is backed by the U.K, government and also has a £2.1 billion ($2.99 billion), three-year retrocessional program backed by international reinsurers.

I am delighted to announce that Flood Re is now live and ready to accept policies,” CEO Brendan McCafferty said Monday in a statement.

“This should make flood cover more affordable and accessible to those in high flood risk areas over time,” he added.

S&P said its A- rating of Flood Re reflected it opinion “of Flood Re's satisfactory business risk profile and strong financial risk profile.”