INSUBCONTINENT EXCLUSIVE:
The flood underinsurance problem is arguably the largest unsolved problem in insurance
Over the last ten years, an average of $41bn per year of flood damage has gone uncovered by insurance, leaving people, businesses and
governments to pay the bill
It estimated that there are $50bn of losses caused by floods around the world
Currently, only $9bn of these are covered by insurance.
FloodFlash, an insurtech startup that offers a way for customers to insure their
property for flood risk, even in high risk areas, by employing an internet-connected water-sensor has raised £1.9m in seed funding from
LocalGlobe, Pentech Ventures and InsurTech Gateway
They previously secured a pre-seed/Angel round in 2017 (Hambro Perks Insurtech Gateway and one private investor).
When a flood happens, it
triggers an internet-connected water-sensor and the payment is made immediately to the policy holder
A FloodFlash policy pays out a pre-agreed, fixed sum as soon as a pre-defined level of flooding occurs
A slice of the premium goes to FloodFlash in return for installing the sensor, plus automated underwriting and claims services.
Founders,
Adam Rimmer and Ian Bartholomew, created the company after looking at ¶metric catastrophe bonds&
These are typically used by large corporations or governments to recover large sums in the event of a catastrophe, but many of the benefits
they confer were previously unavailable to small- and medium-sized enterprises.
Rimmer says: &Every year tens of thousands of business
owners lose their livelihoods because they have been unable to take out an affordable policy that protects their business
In the immediate aftermath of a catastrophic flood, people care less about dollar-for-dollar reimbursement for damages and more about
whether their business will survive at all
We believe FloodFlash event-based insurance is absolutely the best way for insurers to cover higher-risk areas.
FloodFlash is regulated by
the FCA and is currently carrying out a live pilot for its policies with a select group of SMEs in parts of the UK with significant flood
risk, including Carlisle.
Insurance capacity for FloodFlash policies is provided by Everest Re through their syndicate at Lloyd of
London.
The startup has been working as part of the InsurTech Gateway, the InsurTech focused incubator since mid 2017.
Tara Reeves, partner
at LocalGlobe, said: &Climate change is leading to more extreme weather events, but these are often hard to insure
Parametric insurance dramatically reduces underwriting and loss adjustment costs, and those savings can be passed on to the consumer
Adam and Ian background in risk modelling and hydrology is uniquely suited to this challenge.
Eddie Anderson, partner at Pentech Ventures,
said: &FloodFlash is a business that has global potential
There is no country on the planet where severe or freak weather does not cause havoc, whether it is flood or hurricane
We think markets around the world will welcome this innovative, cost-effective way to sell insurance that has been adapted to take into
account the way we live today.
