| Link(s): | Fire Safety Reinsurance Facility finalised | ABI ABI confirms finalisation of Fire Safety Reinsurance Facility – BIBA |
Context
The ABI has confirmed that reinsurance support is now in place to launch the Fire Safety Reinsurance Facility (the Facility) from 1 April 2024, in an industry intervention to help improve the availability of insurance for certain buildings with combustible cladding and other fire safety issues. The Facility has been established by (re)insurance broker McGill and Partners with extensive support from the ABI) and also through working in partnership with BIBA, which will ensure brokers are made aware of the Facility
Key points to note and next actions
- The Facility has two key intentions – to expand capacity for insurers already writing business for affected buildings and to encourage competition across the market so that more firms will provide cover.
- The ultimate solution remains the urgent need for works to take place to make buildings safe and resilient. The Facility is expected to run for three to five years whilst this happens.
- The first step will be for the participating insurers – Allianz, Aviva, Axa, RSA and Zurich – to enter higher-risk buildings they currently insure, and which are awaiting remediation works, into the Facility at the point of their annual renewal. These firms have continued to be active in the market and are the top five firms providing insurance cover for commercial and residential buildings.
- There are options available to Government that could have a more immediate impact for leaseholders. This includes providing financial support to the Facility which may increase market confidence and encourage even more firms to join, and cutting IPT which would provide a 12% reduction in costs.
Leaseholders should contact the person or company responsible for arranging their insurance cover, who can then discuss the Facility with their broker or insurer. More information on how the Facility will work is available here. Information for brokers representing the affected buildings is available from the British Insurance Brokers’ Association.