Global flood risk manager JBA Risk Management and insurer FloodFlash have partnered to launch a parametric flood insurance policy.
Said to be an industry first, the flood insurance applies a parametric approach at property level. It offers insurance for policyholders in frequently flooded areas who have traditionally struggled to obtain cover.
The idea is that the FloodFlash sensor will provide real-time flood depth reporting at property level, which will be used to verify flood events for each individual policy and ensure that each premium quoted is entirely bespoke to the business it serves. When the sensors are triggered by the flood depth agreed in the policy, the claim is verified and payment is made. The firms said this removes the time and uncertainty of loss-adjustment, which means businesses can begin their recovery in days, rather than the months that traditional insurers often require to validate a claim.
JBA and FloodFlash claim over half of small businesses in flood risk areas are currently operating with no flood cover because traditional forms of insurance are unaffordable or come with a large excess. They said parametric insurance reduces the uncertainty in translating flood depth into financial loss by paying property owners a fixed amount as soon as flood water reaches a pre-agreed depth, subsequently reducing premiums.
“FloodFlash’s micro-scale application of parametric insurance at property level is unique and exciting,” JBA director Jane Toothill said. “It demands extremely high-quality underlying data and we’re proud to be able to provide this so as to support FloodFlash’s initiative.”
