Founders: Adam Rimmer and Dr Ian Bartholomew
80% of the world’s catastrophic flood losses aren’t insured. That’s $58bn of uncovered damage – an amount that is set to increase over the coming decades. We combine computer models, cloud software and internet-of-things technology to do one thing: help more people recover from catastrophes using simple, flexible, parametric insurance.
After extensive flooding caused by Hurricane Sandy in 2012, the New York Metropolitan Transport Authority found it very difficult to renew their flood cover. FloodFlash co-founders Adam and Ian helped them develop a parametric policy, which would pay $200m if water rose above a certain depth in the New York harbour. They knew this form of insurance had a wider appeal than just those with the biggest budgets and founded FloodFlash in 2019.
Increasingly, the traditional insurance market is finding it difficult to write flood risk. That’s because traditional insurance products take a wide range of factors into the underwriting equation. They need to establish the potential cost of a flood to set a flood premium, so must consider the fabric of the building, occupancy, stock, business interruption, and many more components. This creates a large uncertainty when pricing a risk, as the true cost a flood might cause is unknown.
This uncertainty has significant knock-on effects – including increased premiums that quickly become unaffordable for many businesses. If the level of uncertainty is too high, they will often refuse to write the risk entirely.
Using the principles of parametric insurance, we remove this uncertainty from the underwriting equation. Instead of establishing the value of damage that flooding might cause to set a price, FloodFlash turn the equation on its head. Clients choose their trigger depths and payout values. We then install a smart internet-of-things sensor on the outside of the client’s property. If water reaches their trigger depth, they receive their pre-agreed payout.
This means we know the value of every single claim before it happens. This provides much greater certainty in what is normally a very tricky part of writing flood cover. We pass that security onto clients as simpler policies and lower premiums.
Our approach also enables us to pay claims quickly. A typical commercial flood claim takes months to conclude, often resulting in significant stress and anxiety. FloodFlash pays claims in hours.
We pay most claims within 48 hours. In November last year, we achieved a new record claim time. Just 3 hours 50 minutes after water reached the client’s trigger depth, the payout was in their bank. Our rapid payouts help reduce claim values, speed up recovery, limit business interruption and vastly reduce the mental impact of flooding. When Storm Babet hit in October, we paid all our claims, in full, within 2 weeks. Dave, whose business flooded during the storm said: ‘From start to finish, this is by far the best process I’ve had with any insurance company.’
Since our launch in 2019, we’ve grown from strength to strength. In the UK, FloodFlash is available through over 10,000 brokers, and we’ve helped clients through 7 named storm events. This year, we launched in the US, meaning more businesses than ever before have access to our award-winning flood insurance.