Flood Re has secured £140 mn in retrocession reinsurance coverage with its first catastrophe bond, Vision 2039 – Series 2025-1, strengthening its financial position against UK flood risks. The UK needs over £1 bn in annual flood defence investment to address rising climate risks.
This transaction marks Flood Re’s entry into the catastrophe bond market, expanding its ability to provide affordable flood insurance.
The bond was issued through the Lloyd’s insurance-linked securities (ILS) transformer structure, London Bridge 2 PCC Limited. Covering losses across England, Wales, Scotland, and Northern Ireland, it provides three years of retrocessional UK flood reinsurance.
CEO Perry Thomas highlighted the importance of this milestone, stating that the bond enhances Flood Re’s reinsurance programme and strengthens protection for UK households.
He noted that it expands access to private market risk transfer while complementing traditional reinsurance arrangements, reducing reliance on conventional reinsurance.
Over time, we expect subsequent issuances to become even more cost-effective, improving programme efficiency. Developing our capability in this market supports Flood Re’s medium-term viability and long-term transition planning.
Perry Thomas, Flood Re’s CEO
With this transaction, Flood Re has taken a key step in its risk transfer strategy for the next three years. By combining traditional reinsurance with capital market solutions, the scheme improves resilience and long-term sustainability.
Thomas also noted the potential for future issuances to become more cost-effective, increasing programme efficiency. He reiterated the organisation’s commitment to strengthening flood protection for future generations.
Reinsurance broker Guy Carpenter supported Flood Re in placing this catastrophe bond. The successful issuance of Vision 2039 reflects Flood Re’s focus on innovation in risk management, ensuring continued access to affordable flood insurance in the face of growing flood threats.
Lloyd’s Chief Financial Officer, Burkhard Keese, welcomed the use of London Bridge 2 for this issuance, calling it a significant development. He noted that this is the first time the structure has been used to support reinsurance from a non-Lloyd’s insurer.
Flood Re is an important element in the UK insurance industry’s response to flood risk and that includes the provision of flood reinsurance to multiple Lloyd’s syndicates.
Burkhard Keese, Lloyd’s CFO
This is yet another milestone in LB2’s growth and development journey as a meaningful source of capital and risk transfer capacity, and we look forward to maintaining this momentum during 2025.
Keese underscored Flood Re’s vital role in the UK insurance industry’s response to flood risks and its provision of reinsurance to multiple Lloyd’s syndicates.
Vision 2039 represents a major achievement for the UK financial services sector. It is the first UK flood risk indemnity catastrophe bond introduced to the market and the first instance of a non-Lloyd’s entity utilizing the London Bridge 2 vehicle.
