JBA Risk Management and FloodFlash have formed a partnership to provide event-based flood insurance, which uses parametric triggers for property exposures.
The product is an industry first and will provide bespoke insurance for policyholders in frequently flooded areas who have traditionally struggled to obtain cover, said the companies in a statement.
The innovation combines JBA’s UK 5m Flood Map and UK Flood Event Set with FloodFlash’s state-of-the-art hardware, the FloodFlash sensor, to apply risk transfer approaches more commonly seen in large-scale transactions such as catastrophe bonds, to individual property and business owners, the companies continued.
Effective quantification of potential flood damage is critical to the FloodFlash approach and JBA’s UK 5m Flood Map allows water depths to be taken for each potential risk location at a range of return periods, at an individual building level. The maps cover river, surface water and coastal flood and take into account the impact of flood defenses.
The FloodFlash sensor provides real-time flood depth reporting at property level more accurately and affordably than anything else on the market. FloodFlash uses this reporting 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. This removes the time and uncertainty of loss-adjustment, meaning businesses can begin their recovery in days, rather than the months that traditional insurers often require to validate a claim.
Over half of UK 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. 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. It demands extremely high-quality underlying data and we’re proud to be able to provide this so as to support FloodFlash’s initiative,” said Jane Toothill, director at JBA, which is a Skipton, England-based specialist in flood risk management, which develops flood maps and catastrophe models.
“No business should fail due to flooding. When we noticed that businesses in Britain were unable to get adequate cover we decided to act. We combine technology and data to provide resilience to the businesses that need it most,” said Ian Bartholomew from FloodFlash.
“JBA’s global flood maps and analytics are essential tools for us in developing FloodFlash and providing the right cover to those clients,” Bartholomew added. “The JBA UK Flood Map is the best in the market and, with their ability to work flexibly, JBA’s specialist team are always on hand to offer technical support and guidance.”
FloodFlash, which is headquartered in London, currently operates in the UK with plans to expand globally using JBA’s global flood data. Founded in 2017, FloodFlash is an insurance technology company that offers a new type of flood cover to commercial property owners, which uses a data and smart sensor approach to remove the uncertainty, cost and time of traditional insurance. FloodFlash is a registered coverholder at Lloyd’s of London and is authorized and regulated by the Financial Conduct Authority.
Source: JBA Risk Management, FloodFlash
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