Should Flood Re be extended to SMEs?

Flood Re is a governmental scheme which, among other things, guarantees insurance affordability and encourages self-protection. Small and medium enterprises (SMEs) are vital for local economies; their survival is one of the holy grails of economic recovery when flooding impacts communities. Nonetheless, SMEs remain being the least prepared in times of crisis, as well as understudied and overlooked in flood resilience efforts. This is especially true in terms of insurance protection where they have been excluded from Flood Re. This new study from the UK flood affected areas looks at the economic costs of flooding on SMEs and proposes ways to increase their flood protection.


  • A unified flood risk management framework for SMEs is urgently needed, because the negative effects of flooding on SMEs affect entire towns located in flood-risk areas.
  • Size and turnover should be taken into account when assessing the economic losses of flooding on SMEs and insurance affordability to better understand the extent of the issue.
  • More needs to be done to fill-in the gap in the understanding the economic costs of SMEs and the effectiveness of property flood resilience and resistance measures to offer affordable and suitable insurance products in flood-risk areas.
  • Flood Re should not be extended to SMEs but rather a new join partnership from the Government and the industry should be established for towns at flood risk.

This short document presents the findings and recommendations of a research project funded by the Centre for Climate Change Economics and Policy, under the Innovation Fund Grant, and the support of the UKRI Research and Innovation Fellowship grant number ES/S001727/1. The aim of the fund is to stimulate the flow of innovative ideas on climate policy from both the practitioner and research communities. CCCEP is funded by the UK Economic and Social Research Council.