Member

On costs, it is important to say that increasing levy 1 not only ensures that Flood Re can continue to purchase reinsurance but minimises the risk of Flood Re needing to implement a levy 2 on the industry. If you look at Flood Re’s financial projections for the next three-year cycle, you will see that the failure to increase levy 1 will cause problems for businesses being able to provide insurance more broadly to UK households. It is important to say that this figure has been properly considered in order that the scheme continues to work effectively and to provide the level of insurance that is required. The problem is that, if we do not get the insurance levels right, insurance companies then put excess on and things become completely unmanageable for householders, which is what was happening before the scheme came in. It is really important that we get this right.