Flood insurer launches the first mass-market parametric flood insurance coverage
With fewer than 5% of small businesses carrying flood insurance, FloodFlash has launched a new coverage option that can pay catastrophic flood claims in just hours after a flood event.
Flood insurance is a vital risk management tool for any business operating in a high-risk area and FloodFlash is giving companies a new option in this coverage market. In October, the company began writing parametric flood insurance policies through brokers in the U.S., following a successful launch in the U.K. earlier this spring.
The company recently named Mark Hara CEO of North America, where he will lead the largest flood insurance market in the world. Hara previously led two insurtech startups — Mylo and BoldPenguin — and has a proven track record in the industry. “I am thrilled and honored to lead FloodFlash in North America and bring their game-changing parametric product to the U.S.,” said Hara in a press statement. “FloodFlash insurance will change the flood insurance market in a really positive way, and I can’t wait to grow our U.S. team and forge lasting broker partnerships.”
With approximately 80% of the world’s catastrophic flood losses uninsured, FloodFlash will use a combination of computer models, cloud software and connected technology to provide coverage to commercial policyholders. Since less than 5% of small and midsize businesses tend to purchase flood insurance, parametric coverage that can pay quickly in the event of a flooding event could be a valuable risk management strategy.
Parametric insurance works under the premise that insurance coverage is triggered when an event meets a series of predetermined criteria. It often provides coverage for events that are hard to insure and can pay quickly once a policy is triggered.
PropertyCasualty360.com asked Hara if the company had established any preliminary limits before it pays claims. “FloodFlash does not have a minimum or maximum limit for coverage, so we can offer coverage for a wide range of businesses, large and small,” he explains. “FloodFlash does not have a deductible like traditional insurance coverage. We use a minimum depth of water to establish triggers for each policy.”
The company is beginning with coverage in five states and PropertyCasualty360.com asked Hara how the company selected those areas for its initial offerings. “We selected California, Texas, Louisiana, Florida, and Virginia based on the demand for commercial flood insurance in these states, the risk of hurricane and natural flooding events,” says Hara. “Flooding occurs every day in flood and non-flood zones and is the number one peril in the U.S.”
According to Hara, the parametric policies will complement other more traditional types of insurance coverage a business may have. “Our target market is commercial businesses whose physical location is critical to operate their business. FloodFlash parametric coverage can be used for business interruption, which is unique and critical for those in hospitality, multi-family, new and used vehicle lots and for buildings under construction. FloodFlash fills a void in the U.S. market to give brokers a new tool to help their customers.”
Hara adds that “FloodFlash can be used for flood coverage as a standalone policy or in combination with NFIP policies since we can offer coverage to about the $500k limit and our coverage can be used for any loss incurred by flooding.”
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