The National Housing Federation has recognized the Association of British Insurers’ (ABI) new reinsurance facility and commented on what it means for UK homeowners.

Launched on April 1, the Fire Safety Reinsurance Facility aims to improve 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 created following a government-ordered 2022 review of the building insurance sector by the Financial Conduct Authority.

This facility is designed to assist owners of multi-occupancy residential buildings where fire safety issues have been identified and need to be remedied. The ABI said there are no specific criteria for buildings to be considered within the facility. Every insurance decision will be made on a commercial, case-by-case basis, with no guarantees of admission to the facility or changes to insurance policies upon admission.

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In a statement, the National Housing Federation noted that housing associations face significant challenges in securing affordable building insurance, which impacts whether buildings need safety-related remedial work or not.

Although this facility represents a step forward, it does not completely solve the insurance affordability issues in this sector. The National Housing Federation continues to raise these challenges with the government.

To help the National Housing Federation communicate these concerns to government, they are looking for case studies where insurance providers required remedial work beyond that recommended in the PAS 9980 report as a condition of affordable insurance.

Which buildings benefit the most?

The British Insurance Brokers Association (BIBA) has indicated that buildings with expensive “layered” insurance plans are likely to benefit more from this facility. The scheme is currently supported by Allianz, Aviva, AXA, RSA and Zurich.

ABI hopes that more insurers will join this facility over time, thus increasing competition in the market and encouraging more companies to provide coverage for damaged buildings.

Building owners can apply for insurance coverage under the facility at the time of policy renewal by contacting their broker or current insurer as usual.

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