UK Fire Safety Reinsurance Facility increases cover limit to £75 million

by Featured News

Insurance cover for fire-risk buildings extended

The Association of British Insurers (ABI) has reported that the UK’s Fire Safety Reinsurance Facility has raised its maximum cover limit from £50 million to £75 million.

The Facility, which was introduced in April 2024, was created to support insurance availability for high-risk multi-occupancy buildings with known fire safety issues.

The change was made following joint discussions between McGill and Partners, which developed the scheme, and the insurers participating in it.

According to ABI, the increase is aimed at allowing more buildings to qualify for cover while remediation efforts are ongoing.

ABI stated that over 760 buildings with a combined insurance value of £17.1 billion were entered into the Facility in its first year of operation.

More buildings now eligible for protection

ABI confirmed that some buildings initially identified as eligible could not be covered under the previous limit.

The organisation said that raising the cover threshold will help address this, particularly for properties requiring higher-value insurance arrangements.

McGill and Partners said the change was made possible through collaboration across the market and reflected the Facility’s impact in its first year.

Steve McGill CBE, Chief Executive Officer at McGill and Partners, said: “The Fire Safety Reinsurance Facility is something we are hugely proud of as a firm.

“Providing a solution to an issue that was so concerning to leaseholders and challenging for the insurance sector alike, is testimony to the way we do business.

“The very fact that we have been able to increase the limits is evidence to the success of the Facility itself.

“This success has enabled us to collaborate with the market to enhance the limits for those insurers who are part of the Facility, allowing greater risk transfer for them and creating further benefits for those involved in the future.”

Leaseholders and brokers see reduced premiums

British Insurance Brokers’ Association (BIBA) Chief Executive Graeme Trudgill said its members had actively used the Facility over the past year.

Trudgill commented: “Our members have made active use of the new Facility over the past twelve months and tell us that it is making a real difference, helping reduce premiums in many cases which brings a direct financial benefit to hard pressed leaseholders.

“The Facility is a great example of industry innovation and collaboration to solve a difficult problem.

“The additional capacity now available will reduce the need for brokers to arrange facultative excess of loss reinsurance, further helping to bring down the overall cost of the placement.”

According to ABI, the increased capacity could encourage more insurers to participate, leading to wider market competition.

It said this could improve access to cover for buildings awaiting remediation and reduce financial pressures on leaseholders in England, Wales and Northern Ireland, as well as owners in Scotland.

Industry reiterates importance of remediation

The ABI reiterated that the Facility is not a permanent solution.

It said long-term improvements to building safety must come through completed remediation, supported by government programmes in all UK nations.

The industry body stated that only buildings meeting a higher standard of fire resilience will be eligible for conventional insurance cover without needing the Facility.

Hannah Gurga, Director General at ABI, said: “The tragic fire at Grenfell Tower exposed critical failures in the building safety regime.

“As a result, insurers had to reassess their understanding of the risk these buildings posed, and leaseholders have shouldered the financial and emotional burden of living in homes that weren’t as safe as they first thought.

“By establishing the Fire Safety Reinsurance Facility, the industry is working to improve capacity in the market for multi-occupancy buildings and, by extension, support leaseholders.

“Increasing the cover limit to £75 million is a significant step and I hope this will mean that more buildings and leaseholders can be supported while remediation work takes place.”

Call for alignment on remediation standards

The ABI has urged government to align remediation requirements with insurer expectations regarding fire risk.

In its latest publication, Assessing the fire risk of cladding systems: an insurance perspective, the ABI outlined how its assessments often go beyond what current building regulations require.

The report, created in partnership with the Fire Protection Association (FPA), recommends full removal of combustible materials from external walls to limit the potential for fire spread.

The ABI called for these concerns to be considered within the Remediation Acceleration Plan and equivalent programmes across the devolved nations.

Swiss Re, which acts as lead reinsurer for the Facility, said expanding the scheme would increase access to necessary cover.

Aidan Kerr, Director of Public Sector Solutions at Swiss Re, said: “The Fire Safety Reinsurance Facility continues to play a crucial role in ensuring cover remains available for residents of multi-occupancy buildings, whilst the crucial remediation work takes place.

“With this expansion of the Facility, even more affected buildings and their residents can have access to the vital protection that insurance provides.

“Swiss Re is proud to be the lead reinsurer for the Fire Safety Reinsurance Facility; it’s a great example of how the insurance industry can come together to help solve some of the most pressing problems across the UK.”

UK fire safety reinsurance Facility increases cover limit to £75 million: Summary

The Fire Safety Reinsurance Facility has increased its cover limit from £50 million to £75 million.

The change was confirmed by the Association of British Insurers.

McGill and Partners developed the scheme with support from insurers.

The Facility was launched in April 2024.

It covers multi-occupancy buildings with known fire safety risks.

Over 760 buildings were entered into the scheme in its first year.

The combined value of insured buildings reached £17.1 billion.

The new limit will allow more high-value buildings to access cover.

The British Insurance Brokers’ Association said it helped reduce premiums.

The ABI stated that remediation remains the long-term solution.

Swiss Re is the Facility’s lead reinsurer.

The ABI published a report with the FPA about fire risk in cladding.

It recommends removing combustible materials from building exteriors.

The ABI urged government to reflect these standards in its remediation plans.

The Facility aims to be phased out once risks are fully addressed.

Fire warning issued as Aviva links warm weather to rise in UK fire claims

by Featured NewsSafety

Fire risk in UK homes linked to heatwave conditions

Aviva has issued a fire warning after reporting a surge in fire-related insurance claims during periods of warm weather across the UK.

The insurer said fire claims in April and May 2025 have already exceeded those recorded in any other month this year, with many starting outside the home.

According to Aviva’s analysis of five years of data, the rise in claims correlates with periods of dry weather, high temperatures and increased outdoor activity.

The company attributed the increase in part to seasonal garden use, with fires linked to barbecues, firepits and bonfires among the most common causes.

Aviva noted that lightning-related fire claims have also risen in recent years, with September 2024 recording three times more lightning claims than any other month that year.

Outdoor fire incidents surge during spring months

Aviva stated that April and May 2025 have seen more outdoor fire claims than any other months of the year to date.

The insurer reported that this surge follows unusually sunny spring weather, with higher-than-average sunshine levels prompting greater garden use.

Fire claims linked to gardens include damage to sheds, decking, garages and fences caused by escaped embers or improper disposal of ash.

Aviva provided several examples from recent claims, including firepits reigniting after disposal, barbecue embers landing on sheds, and bonfires spreading to adjacent properties.

The company said the average cost of a garden-related fire claim is close to £16,000.

Data shows increase in lightning-related fire claims

Aviva’s records show a growing number of fire claims caused by lightning strikes, particularly during late summer months.

The insurer found that lightning can cause damage to electrical systems by striking roofs or loft spaces, sometimes sparking fires within homes.

In September 2024 alone, lightning claims were three times higher than in any other month that year.

Aviva stated that claims involving lightning have steadily increased over the past five years, aligning with shifts in seasonal weather patterns.

The company linked this trend to a rise in short-duration but high-intensity summer storms across parts of the UK.

Consumer concerns and fire prevention advice

Aviva commissioned a survey of 2,000 UK residents to understand public attitudes towards seasonal fire safety.

The survey found that 12 percent of respondents worry more about fire risks during hot weather.

It also showed that 13 percent report greater concern during barbecue season.

To support home fire safety, Aviva issued practical advice for households, including warnings on barbecues, bonfires, firepits, lithium-ion chargers and reflective garden items.

The insurer advised against using bonfires during dry or windy conditions and highlighted the fire risk from magnified sunlight through glass objects.

Aviva calls for fire safety awareness as UK sees record spring temperatures

Hannah Davidson, Senior Underwriting Manager at Aviva, said the rise in claims highlights the need for seasonal caution: “Although warmer weather is often welcome news, we’re urging people to remain vigilant when it comes to fire safety.

“The warm weather, paired with a lack of rain means that once started, a fire can spread very quickly – particularly as the ground is dry.

“Popular items in gardens, such as wooden fences and sheds, can be flammable, causing flames to spread quickly.

“A small fire in the garden can also spread to the home, causing significant damage.

“Whether it’s hosting friends for a barbecue, charging devices and tools outside or in the home, or even hanging a mirror outside in your garden for decoration, it’s worth paying close attention to what could become a potential fire hazard.

“With the average fire claim involving a garden amounting to almost £16,000, it’s worth taking out home insurance if you haven’t already, giving you peace of mind knowing that your home and belongings are protected.”

Aviva advised people to unplug appliances once charged, keep reflective objects away from windowsills and properly extinguish cigarettes.

It added that taking simple precautions could help reduce the number and severity of fire claims during warmer months.

Fire warning issued as Aviva links warm weather to rise in UK fire claims: Summary

Aviva has reported that fire-related insurance claims rise during warmer weather in the UK.

Data from the company showed that April and May 2025 saw more fire claims than any other month in the year.

Claims involving gardens, barbecues and bonfires were the most commonly reported.

The average cost of a garden fire claim was reported to be nearly £16,000.

Lightning-related fire claims have also increased over the past five years.

In September 2024, lightning claims were three times higher than any other month that year.

A survey of 2,000 UK consumers found that 12 percent worry about fire safety in hot weather.

Thirteen percent reported concern during barbecue season.

Hannah Davidson, Senior Underwriting Manager at Aviva, advised people to remain cautious during dry conditions.

Davidson said outdoor items such as fences and sheds can quickly catch fire and spread flames.

She also warned that indoor fires may start from overheating devices or magnified sunlight.

Aviva issued several tips to reduce fire risk, including safe disposal of ash and unplugging chargers.

The company said being aware of seasonal fire hazards can help protect homes and belongings.

Allianz UK highlights EV battery fire risks for motor traders

by Featured NewsSafety

Allianz warns motor traders of EV battery fire hazards

Allianz UK has advised motor traders to be aware of the risks associated with electric vehicle (EV) battery fires.

The insurer noted that lithium-ion batteries, used in EVs, present a fire hazard when damaged, improperly stored, or mishandled, leading to incidents with severe financial and structural consequences.

Research, including findings from Thatcham Research, indicates that EVs are generally less likely to catch fire than petrol or diesel vehicles.

However, when fires do occur, they can be more intense due to the nature of lithium-ion battery combustion.

Allianz has reported cases where battery-related fires have led to extensive property damage.

In two recent incidents, EV battery fires caused insurance claims exceeding £5 million and £1.5 million respectively.

Both incidents involved faulty batteries that had been removed from vehicles and were awaiting manufacturer collection.

Challenges posed by lithium-ion battery fires

Lithium-ion batteries can enter a state known as ‘thermal runaway’, where internal chemical reactions cause uncontrolled heat generation.

This can result in fires that are difficult to extinguish and may reignite days or weeks after the initial event.

Olivia Baker, head of motor trade at Allianz UK, commented: “The severity and financial impact of lithium-ion battery fires are considerable.

Due to the chemical reactions and toxic material that are left behind, these fires can render buildings beyond economical repair.

“Understanding the risks and implementing effective prevention and management strategies are crucial to safeguarding businesses and ensuring the safety of employees, though thankfully at the moment the total number of claims is relatively low.”

Risks beyond electric vehicle batteries

Allianz also noted that lithium-ion batteries in portable power tools can present a fire risk.

In one case, a tyre fitting centre experienced a fire resulting in a £250,000 claim after a power tool ignited while charging.

Motor traders handling EVs may face additional risks when dealing with vehicles subject to recalls, battery defects, or advisory notices.

Businesses with high vehicle turnover, such as repair centres and sales dealerships, could be particularly affected.

Franchised dealers and breakdown recovery services are also exposed to risks when diagnosing or transporting EVs with potential battery issues.

Recommendations for motor traders

Allianz advises motor traders to take several precautions to reduce the risk of lithium-ion battery fires.

The insurer recommends:

  • Implementing thorough inspection protocols for damaged batteries.
  • Ensuring safe storage and charging practices.
  • Collaborating with insurers and brokers to improve risk prevention strategies.

Allianz provides risk management guidance to brokers and policyholders to help businesses reduce hazards associated with lithium-ion batteries.

Risks of lithium-ion battery fires in the motor trade sector: Summary

Allianz UK has warned motor traders about the risks associated with lithium-ion battery fires in electric vehicles.

The insurer highlighted that while EVs are less likely to catch fire than traditional vehicles, the intensity of battery fires presents challenges for businesses.

Two recent cases resulted in insurance claims exceeding £5 million and £1.5 million due to faulty batteries stored at motor trade premises.

Allianz also reported a £250,000 claim linked to a fire caused by a lithium-ion power tool battery.

Thermal runaway in lithium-ion batteries can lead to severe fires that are difficult to extinguish.

Allianz recommends that motor traders implement strict inspection, storage, and charging procedures.

The insurer provides risk management support to brokers and policyholders to mitigate these hazards.

New fire safety reinsurance initiative to improve insurance availability for buildings

by Featured NewsSafety

Introduction of the Fire Safety Reinsurance Facility

The Fire Safety Reinsurance Facility (the Facility) is set to launch on 1 April 2024, marking a significant intervention in the insurance industry aimed at enhancing the availability of insurance for buildings with combustible cladding and other fire safety concerns.

Established by McGill and Partners with substantial support from the Association of British Insurers (ABI) and the British Insurance Brokers’ Association (BIBA), the Facility seeks to expand insurance capacity for affected buildings and foster market competition.

This initiative is designed as a temporary measure, expected to operate for three to five years, to address urgent safety works needed to ensure building safety and resilience.

Mechanism and impact of the Facility

Participating insurers, including Allianz, Aviva, Axa, RSA, and Zurich, will introduce high-risk buildings awaiting remediation works into the Facility during their annual renewal process.

These companies, actively providing cover for commercial and residential buildings, aim to mitigate the fragmented insurance approach caused by the heightened risk profiles of certain buildings.

The Grenfell tragedy and subsequent reviews have underscored the necessity of this Facility by revealing the complexities surrounding insurance coverage for buildings with significant fire safety issues.

Statements from industry leaders

Steve McGill CBE, Founder & CEO of McGill and Partners, highlighted the importance of addressing fire safety risks in insuring cladded, multi-occupancy buildings: “Insuring cladded, multi-occupancy buildings that pose a fire safety risk has challenged our industry for some time.

“However, this unique facility aims to present a competitive market solution that will address this important issue and I am incredibly proud that McGill and Partners has played such a pivotal role.”

Mervyn Skeet, ABI Director of General Insurance, also stressed the role of the ABI in supporting leaseholders and improving insurance availability: “Supporting leaseholders and making insurance more widely available for higher-risk buildings with fire safety issues has been one of the ABI’s top priorities.

“I’m grateful to McGill and Partners and all the firms involved for their help in establishing this commercial intervention and hope it will encourage more insurers to enter the market and offer cover for these buildings.”

IFSJ Comment

The initiation of the Fire Safety Reinsurance Facility is a commendable step towards resolving the ongoing insurance challenges faced by buildings with fire safety concerns.

By creating a collaborative platform that involves major insurers and reinsurance companies, the industry is taking a proactive approach to not only expand insurance capacity but also encourage necessary safety remediations.

While the Facility offers a temporary solution, its underlying goal to incite broader industry and governmental action towards building safety is vital.

As the Facility begins its operations, the focus on supporting leaseholders and reducing the insurance complexities for buildings at risk signifies a positive shift towards a more secure and resilient built environment.