Carriers
UK Fire Safety Reinsurance Facility covers £19.6bn of risks in second year
By Insurance Wire Staff, . Insurance Wire.
The Fire Safety Reinsurance Facility secured insurance cover for 730 risks with a combined insured value of £19.6bn in its second year of operation, the Association of British Insurers reported, as cited by Reinsurance News. That compares with 703 risks covered in the facility's first year, representing incremental but positive growth.
The facility was launched in April 2024, according to Reinsurance News, and was created by the re/insurance industry to address a specific and persistent problem: buildings with unresolved fire safety defects, many of them residential blocks affected by cladding or other issues identified in the wake of the Grenfell Tower fire, that were struggling to obtain cover in the standard market. By pooling capacity through a reinsurance structure, the facility allows insurers to write risks they would otherwise decline or price prohibitively.
Reinsurance News did not report a breakdown of the risks by building type, geography, or defect category, nor did it provide figures on premium volume or the number of insurers participating in the facility. The ABI's announcement, as reported by Reinsurance News, does not indicate how many buildings applied and were turned away, which would be the more telling measure of whether the facility is meeting demand or simply absorbing what the market was already willing to write.
The growth from 703 to 730 risks is real but narrow, a 3.8 percent increase in placements. Whether that reflects a maturing pipeline of remediated buildings leaving the facility, a slow rate of new applications, or capacity constraints within the pool itself is not established by the reporting. Those distinctions matter for anyone trying to assess whether the facility is scaling to the problem or plateauing.
What the figures do confirm is that the facility has now operated through two full cycles without a reported withdrawal of capacity, which in itself is meaningful. Reinsurance-backed pools of this kind, particularly those covering concentrated property risks with long-tail remediation timelines, can be fragile if early loss experience disappoints. The absence of any reported deterioration in participation is a signal, if a quiet one, that the reinsurance market remains willing to stand behind the structure.
For brokers placing fire-safety-affected buildings, the practical question is whether the facility's appetite is expanding in line with the stock of buildings still awaiting remediation. Government remediation programmes have moved at varying speeds, and a significant number of buildings remain in an intermediate state where defects are identified but works are not yet complete or funded. Those are precisely the risks the facility was designed to serve, and the reported figures do not yet show whether it is reaching them at scale.
The ABI is expected to continue reporting annually on the facility's performance. The figures to watch in subsequent years are not just the count of risks placed but any data on declined applications and on whether average insured values are rising, which would indicate the facility is moving into larger or more complex buildings.
Source: https://www.reinsurancene.ws/fire-safety-reinsurance-facility-sees-19-6bn-of-risks-secure-cover-abi/
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