FoodFlash, an insurtech that offers parametric insurance solutions to previously un-insurable flood risks, has raised $1.9 million in seed funding from LocalGlobe, Pentech Ventures and InsurTech Gateway.
FloodFlash leverages internet-connected water sensors to trigger a pre-agreed fixed sum immediately to a policyholder.
An example of event-based insurance, settlement is made based on a pre-defined triggering event as opposed to the cost of damages.
“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,” explained Adam Rimmer, co-founder of FloodFlash.
“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.”
The startup has been working as part of the InsurTech Gateway incubator since mid 2017 and currently employs five people, with that number expected to double over the next six months as it prepares for product launch in October.
The team already includes published scientists, expert insurance software engineers and a former Dyson product designer.
Ian Bartholomew, Co-Founder of FloodFlash, commented, “The efficiencies in the technology that we have developed make FloodFlash policies available to those who need it most.”
“The FloodFlash sensor and high-resolution pricing algorithms are essential parts of that. We think that by pricing risk in this way, and by promising instant settlement, we can help to resolve what is arguably the largest market failure in insurance.”
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 policies is provided by Everest Re through their syndicate at Lloyd’s of London. The company is becoming a coverholder at Lloyd’s, giving it the ability to underwrite and issue a larger number of policies.
“FloodFlash has designed a product that will revolutionise the sale of flood insurance in this country and around the world,” said Stephen Brittain, Co-Founder and Director of InsurTech Gateway.
“We are delighted to have had the opportunity to fast-track the company through the early stages of concept definition and funding rounds to ready it for scaling.”
Tara Reeves, Partner at LocalGlobe, added, “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.”
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.”
Sam Geddes at Everest Insurance, commented, “We are excited to play a part in the launch of this new customised solution to help alleviate the significant flood risk that so many continue to contend with around the world.”
“Harnessing big data while incorporating new innovations in science and technology will continue to be integral as we work alongside other industry leaders to put right a known problem in the insurance market.”