Flood insurance is a vital risk management tool for any business operating in a high risk area and FloodFlash offers businesses a new option in this coverage market. In October, the company began underwriting parametric flood insurance policies through brokers in the United States, following a successful launch in the UK in early spring.
The company recently named Mark Hara CEO of North America, where he will lead the world’s largest flood insurance market. 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 groundbreaking parametric product to the United States,” Hara said in a press release. “FloodFlash Insurance will change the flood insurance market in a truly positive way, and I look forward to growing our US team and forging lasting broker partnerships.”
While approximately 80% of catastrophic flood losses worldwide are uninsured, FloodFlash will use a combination of computational models, cloud software and connected technologies to provide coverage to commercial policyholders. Given that less than 5% of small and medium businesses tend to carry flood insurance, parametric coverage that can pay out quickly in the event of a flood could be a valuable risk management strategy.
Parametric insurance operates on the principle that insurance coverage is triggered when an event meets a series of predetermined criteria. It often provides cover for hard-to-insure events and can pay out quickly once a policy is triggered.
PropertyCasualty360.com asked Hara if the company set any preliminary limits before paying the claims. “FloodFlash has no minimum or maximum coverage limit, so we can provide coverage to a wide range of businesses, large and small,” he explains. “FloodFlash does not have a deductible like traditional insurance coverage. We use a minimum water depth to establish triggers for each policy.”
The company is starting out by covering 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 demand for commercial flood insurance in those states based on hurricane risk and natural flooding,” Hara says. “Floods happen every day in flood-prone and non-flood-prone areas and are the number one peril in the United States”
According to Hara, 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 operating their business. Parametric FloodFlash coverage can be used for business interruption, which is unique and critical for the hospitality, multi-family housing, new and used vehicle lots, and buildings under construction industries. FloodFlash fills a void in the US market by providing brokers with a new tool to help their clients. »
Hara adds that “FloodFlash can be used for flood cover as a standalone policy or in combination with NFIP policies since we can offer cover up to the limit of approximately $500,000 and our cover can be used for any loss suffered by the floods”.
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