Flood Re CEO cites innovative milestone as debut cat bond Vision 2039 completed
Perry Thomas, Chief Executive Officer (CEO) of Flood Re, has announced the successful completion of the company’s debut catastrophe bond, the £140 million London Bridge 2 PCC Limited (Vision 2039 – 2025-1) issuance, stating that it represents an “innovative transaction” that strengthens the firm’s reinsurance programme and enhances protection for UK households against flooding.
Back in February, we reported that Flood Re had entered the cat bond market for the first time, in search of £100 million in fully-collateralized UK flood retrocessional reinsurance.
Then, in our first update on the deal, we revealed that the target size for the issuance had increased by 40%, with £140 million in multi-year protection sought by Flood Re.
And then, just last week, we reported that Flood Re had managed to secure its first catastrophe bond, with the notes priced at the top-end of initial guidance to provide that 40% upsized £140 million in fully-collateralised UK flood retrocessional reinsurance.
It’s also important to note, that this Vision 2039 deal marks the first use of the London Bridge 2 vehicle for an insurance-linked securities (ILS) arrangement by a non-Lloyd’s entity.
The London Bridge 2 PCC Limited (Vision 2039 – 2025-1) issuance will provide three years of retrocessional UK flood reinsurance, covering losses across England, Wales, Scotland and Northern Ireland.
“The transaction strengthens the diversification of Flood Re’s reinsurance programme, marking a significant step in its broader risk transfer strategy for the next three years. By complementing traditional reinsurance partnerships with access to the wider capital markets through the bond, Flood Re is enhancing the scheme’s resilience and sustainability,” Flood Re commented.
The successful placement of this Vision 2039 deal also underscores the scheme’s commitment to expand in risk management, as Flood Re aims to ensure that affordable flood insurance remains accessible to UK households facing the growing threat of flooding.
Beyond its importance for flood insurance, this transaction also marks a major milestone for the UK financial services sector as well.
Vision 2039 is the first UK flood risk indemnity catastrophe bond brought to market, and as mentioned, represents the first use of the London Bridge 2 vehicle by a non-Lloyd’s entity.
“It serves as an excellent example of the UK ILS regime’s effectiveness and showcases the strength of London and the UK as a hub for financial services and climate resilience,” Flood Re said.
Perry Thomas, CEO of Flood Re, commented: “We are pleased to announce the successful completion of our debut catastrophe bond, Vision 2039 – an innovative transaction that strengthens our reinsurance programme and enhances protection for UK households against flooding.”
Adding: “This milestone expands our access to alternative private market risk transfer, and complements our wider traditional reinsurance structure reducing reliance on traditional 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. As we move into a new era for the scheme, we remain committed to building lasting resilience and protection for future generations.”
Burkhard Keese, Chief Financial Officer, Lloyd’s, said: “I am delighted to see London Bridge 2 as the issuance vehicle for Flood Re’s inaugural Cat Bond, the first time it has been used to support the reinsurance of risk 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. 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.”
Charles Whitmore, Co-Head of Global Clients, Guy Carpenter, added: “Guy Carpenter is proud to have supported Flood Re on their inaugural cat bond issuance. Following a well-planned marketing campaign, this ground-breaking cat bond, the first ever to cover UK nationwide flood risk, received strong backing from capital market investors. The cat bond has been designed to integrate seamlessly with the traditional reinsurance programme, offering UK policyholders comprehensive protection against the financial impact of any major flood event.”
Jennifer Tait, Partner, Willkie Farr & Gallagher, said: “Willkie was pleased to advise Flood Re on its inaugural catastrophe bond transaction, marking the first ever catastrophe bond in the UK designed to protect against flood losses on an indemnity trigger basis. This transaction is a significant milestone for Flood Re, further diversifying its reinsurance programme, and for UK households, ensuring the continued availability and accessibility of flood insurance. It also serves as a strong endorsement of the UK ILS regime and the London Bridge platform at Lloyd’s. The successful completion of this transaction was made possible through the invaluable support of Lloyd’s, London Bridge and the PRA.”
As a reminder, you can read all about this London Bridge 2 PCC Limited (Vision 2039 – 2025-1) catastrophe bond transaction in our Deal Directory, where you can analyse details of almost every cat bond ever issued.
