Flood Re is a joint initiative between the UK government and the Association of British Insurers (ABI). The scheme will cap flood insurance premiums for householders at a level based on the council tax band of domestic properties. Claims made by people in homes at high risk of flooding would instead be funded through an industry levy, which will be passed back to consumers at an estimated cost of £10.50 on annual premiums.
Premiums are collected in a central fund and used to pay out claims to insurers. Under the reinsurance deal, Flood Re will pass the majority of its risk to 38 companies for three years, while it builds up the central fund.
The reinsurance programme was oversubscribed, with 45 organisations offering to join, Flood Re said.
"Securing £2.1bn in annual protection is an important milestone towards Flood Re being able to accept policies for flood-risk households," said Brendan McCafferty, Flood Re chief executive.
"Although the reinsurance programme has now been completed on time and ahead of planned budget there is still a lot of work to be done. We are testing our systems with insurers to ensure they work effectively and will also continue to work closely with the financial regulators to obtain the authorisation we need to operate," he said.
Flood Re is expected to accept its first policies in April.
McCafferty said last month that homeowners who fail to take steps to prevent their property from flooding could in future be excluded from the flood insurance scheme.
Flood Re covers 350,000 households, but does not cover businesses, houses built since 2009, or houses in council tax band H.
Reuters reported last month that UK insurance brokers were working on a flood insurance product for SMEs excluded from the scope of Flood Re. Graeme Trudgill, executive director of the British Insurance Brokers' Association (BIBA), told the news service that the plans would involve large insurance brokers and would not require a Flood Re-style industry levy.