National Housing Federation comments on ABI’s reinsurance facility
National Housing Federation comments on ABI’s reinsurance facility | Insurance Business Canada
Reinsurance
National Housing Federation comments on ABI’s reinsurance facility
Organization noted that it is aware of program’s shortcomings
Reinsurance
By
Kenneth Araullo
The National Housing Federation has acknowledged the Association of British Insurers’ (ABI) new reinsurance facility and has commented on what it means for homeowners in the UK.
Launched on April 1, the “Fire Safety Reinsurance Facility” is aimed at improving access to affordable insurance for buildings with combustible cladding and other fire safety issues. This facility is available to all building owners, including housing associations, and was established following a 2022 government-requested review of the buildings insurance sector by the Financial Conduct Authority.
The facility is designed to assist owners of multi-occupancy residential buildings where fire safety issues have been identified and remediation is required. The ABI has stated that there are no specific criteria for buildings to be considered under the facility. Each insurance decision will be made on a case-by-case commercial basis, with no guarantees of acceptance into the facility or changes to insurance policies upon entry.
In a statement, the National Housing Federation noted that housing associations are facing significant challenges in securing affordable buildings insurance, affecting buildings whether or not they require safety-related remedial work.
While the facility represents a step forward, it does not fully resolve the sector’s insurance affordability issues. The National Housing Federation continues to raise these challenges with the government.
To help the National Housing Federation communicate these concerns to the government, they are seeking case studies where insurance providers have demanded remedial works beyond those recommended in a PAS 9980 report as a condition for affordable insurance.
Which buildings benefit the most?
The British Insurance Brokers Association (BIBA) has indicated that buildings with costly “layered” insurance schemes are likely to benefit the most from the facility. The scheme is currently supported by Allianz, Aviva, AXA, RSA, and Zurich.
The ABI hopes that, over time, more insurance companies will join the facility, thereby increasing competition in the market and encouraging more firms to provide coverage for affected buildings.
Building owners can apply for insurance cover under the facility at the time of policy renewal by contacting their existing broker or insurer as usual.
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