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Flood Re welcomes agreement with Government and announces Executive Appointments

Flood Re has welcomed a wide-ranging agreement with the Government on the draft Regulations that will complete the legal framework needed to establish it.

As part of the deal agreed, all Band H properties and Band I homes in Wales will now be included in Flood Re for the first time and outstanding issues relating to the financial controls in place for Flood Re have been agreed in principle.

The agreement paves the way for the next key steps needed in the implementation of Flood Re. The firm will require full regulatory approval from the Prudential Regulatory Authority and Financial Conduct Authority. Flood Re expects to announce the successful bidders for both the Managing Agent and Reinsurance Broker in January.

Flood Re is also announcing the appointment of its Chief Financial Officer and Operations Director, following a process led by its CEO, Brendan McCafferty. Both appointments will be subject to regulatory approval as part of Flood Re’s authorisation.

Flood Re’s Chief Financial Officer will be Adam Golding, currently Finance Director of Amlin Underwriting Ltd, a Lloyd’s syndicate.  Adam has 23 years experience as an insurance finance professional, having qualified as a Chartered Accountant with Coopers & Lybrand in 1994 and having also worked for QBE and Cardif Pinnacle.

Flood Re’s Operations Director will be Aidan Kerr, currently Assistant Director and Head of Property at the ABI where he has been instrumental in designing and shaping Flood Re over the last two and a half years. Aidan is a former Head of Investment & Funding at the Environment Agency and is an experienced management consultant, having qualified as a Chartered Accountant.

Flood Re CEO, Brendan McCafferty said:

"My top priority on becoming CEO of Flood Re in November was to lead Flood Re’s negotiation with the Government to try and resolve the outstanding issues around its design. I am very pleased we have reached a workable and sensible agreement that will enable Flood Re to move forward. As a result, we are closer to the day when we can deliver on our promise to help provide affordable and available insurance for those at greatest risk of flooding."

Commenting on the appointment of Adam Golding and Aidan Kerr, Brendan McCafferty said:

"Adam brings a depth of knowledge to Flood Re, having held a number of senior financial roles within the insurance industry. He is used to working with regulators and focusing on delivering sound financial controls and commercial outcomes."

"Aidan has a deep and practical knowledge of how Flood Re will operate, having been a key part of its progress to date. This will enable us to ensure we can work effectively with our Managing Agent to get the best possible operational delivery."

Incoming Flood Re CFO, Adam Golding said:

"I am delighted to be part of this exciting opportunity with Flood Re, which will have such a positive impact on communities with high flood risk. I look forward to working with the Flood Re team, insurers and all stakeholders to provide a much needed insurance solution to those affected."

Incoming Flood Re Operations Director, Aidan Kerr said:

"I am privileged to have been involved in the development of Flood Re, an insurer-led initiative that is so important for hundreds of thousands of households at risk of flooding. I am delighted to be able to continue to help make Flood Re a reality as Operations Director and look forward to working with Brendan, Adam and the team to achieve this."

ENDS

Notes:

1. In September 2014, Flood Re published its response to the Department for Environment Food & Rural Affairs consultation on the Flood Reinsurance Scheme Regulations. The key issues were:

  • A legal obligation not to make a loss on Flood Re’s Profit and Loss account (P&L) of more than £100m if classified as a public body by the Office of National Statistics (“ONS”);
  • A wide-ranging power in legislation to call additional amounts from relevant insurers through Levy II as a tax, rather than as capital contributions;
  • The need to make explicit that capital contributions provided at any future time by relevant insurers as Levy II can be repaid by Flood Re at the absolute discretion of directors (subject to PRA approval), but no earlier than 5 years after the contribution is made;
  • The restrictions on Flood Re’s ability to borrow;
  • The exclusion of Band H properties and Band I properties in Wales.

More details can be found here.

The key components of this agreement are:

  • Flood Re Scheme agrees to purchase reinsurance so that the Scheme does not have an impact on public sector net borrowing (PSNB) at the end of any one financial year greater than a limit to be agreed before Flood Re goes live. This will be reviewed at three-yearly intervals, and will consider availability and affordability to Flood Re.
  • The current wording about limiting the impact on PSNB will be removed from the regulations.
  • Levy II’s original purpose has been maintained as a means of capitalising Flood Re. There is the possibility, but not the right, of any Levy II raised as capital contributions being repaid. This repayment is at the absolute discretion of Flood Re’s Directors, is subject to the approval of the PRA and cannot take place any earlier than 5 years after Levy II is called.
  • The definition of borrowing has been clarifying, and its limit has been raised to an acceptable level of £25m.
  • Insurers will be able to use Flood Re for Band H properties and Band I properties in Wales.

2. Adam Golding is currently Finance Director of Amlin Underwriting Limited. He qualified as a Chartered Accountant with Coopers & Lybrand (now, PricewaterhouseCoopers) in 1994, working in London and Sydney until 1998.

Adam subsequently worked for seven years with QBE Insurance in London, part of this time as Head of Finance for their UK company and Lloyd’s Operations.  More latterly Adam spent five years as Chief Financial Officer of Cardif Pinnacle, part of the BNP Paribas UK Group, joining Amlin in 2012.

3. Aidan Kerr is currently Head of Property, Fraud and Specialist Lines at the ABI. His role covers the delivery of Flood Re, and leading on the industry’s strategy for combating fraud.

Aidan is a chartered management accountant who joined the ABI from the Environment Agency where he was the Head of Investment and Funding. Before that, he was a senior manager delivering finance transformation projects at Accenture.


Last updated 01/07/2016