Global flood risk modeller JBA Risk Management has partnered with insurtech firm Floodflash to create a UK parametric flood insurance policy.
The new product, which JBA and Floodflash claim is an industry first, will provide bespoke insurance for policyholders in frequently flooded areas who have traditionally struggled to obtain cover.
It will combine JBA’s UK 5m Flood Map and UK Flood Event Set with hardware from Floodflash to apply risk transfer approaches more commonly seen in large-scale transactions such as catastrophe bonds, to individual property and business owners.
The FloodFlash sensor provides real-time flood depth reporting at property level, which is used to verify flood events for each individual policy and ensure that premium quoted is matched with each business.
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.
However, parametric insurance is able to substantially lower premiums by reducing the uncertainty involved in translating flood depth into financial loss.
“FloodFlash’s micro-scale application of parametric insurance at property level is unique and exciting,” said Jane Toothill, Director at JBA.
“It demands extremely high-quality underlying data and we’re proud to be able to provide this so as to support FloodFlash’s initiative.”
Ian Bartholomew from FloodFlash also commented: “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.”
“JBA’s global flood maps and analytics are essential tools for us in developing FloodFlash and providing the right cover to those clients,” he continued. “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.”