A trailblazing听InsurTech听has revolutionised the听speed and ease听with which听flooded听businesses听receive pay-outs.听
London-based听贵濒辞辞诲贵濒补蝉丑鈥檚听innovative 鈥榩arametric insurance鈥� approach involves a digital sensor being installed on a听premises.听听
When flood waters hit a set level, a digital signal is sent instantly to听FloodFlash, triggering payment of the agreed amount of cover.听
This is in stark contrast to how conventional flood insurance works, where claims are based on the subjective measure of the amount of damage inflicted by the flood when it hits and over time as the waters recede. 听
These assessments require site visits by a claims assessor – someone looking to pay out as little as possible – and with whom it can take many months to reach agreement.听
When听Storm听Ciara hit last year,听FloodFlash听set a new world record for speed of claims payment,听with money in the flooded business鈥� bank account just 23 hours from when the water hit听the required depth.听
Then a听few weeks ago, when听Storm听Christoph hit in the North West and the Midlands,听the firm听broke听its听own record听with a claims payment in the insured firm鈥檚 bank account less than 10 hours听from when the flood hit.听听听听听听听
“At the start of the process, the client selects up to three trigger depths for the policy; then we ask how much money they would need if flooding reached each trigger depth,” co-founder Adam Rimmer explained to 老九品茶Cloud.听
鈥淲e attach our own Internet of Things sensor to the client鈥檚 property, which measures flood depths and sends the data to FloodFlash HQ via mobile networks.
“As soon as flood water reaches the client鈥檚 trigger depth, we validate the claim and pay the money they requested, usually within 48 hours.
鈥淭he latest test for our claims came during Storm Christoph in January, when we paid our fastest claim ever. It took just 9 hours and 44 minutes from the client flooding to the full听pay-out arriving in their bank account – and this all happened fully remotely during a full lockdown. 听
鈥淭his is several orders of magnitude faster than the months it takes traditional insurance to pay this.鈥�听
The businesses hit by the floods were already struggling financially through the impact of COVID-19 lockdown.听
鈥淔ast pay-outs that protect business cash flows are the biggest guarantee of survival for businesses that have been under huge financial pressure thanks to COVID. After all, what good is a pay-out three months later when the money goes to the liquidators?鈥� said Rimmer.听
Indeed, because听FloodFlash works entirely remotely, with no need for a claims inspector to turn up to assess damage, claims payment carries on just as fast and efficiently even when lockdown rules prohibit travel or meetings.听
鈥淭here are two sides to听FloodFlash听tech behind the scenes. The sensor is essentially the听FloodFlash听claims department: without it, there鈥檚 no way we鈥檇 be able to pay our claims as fast as we do,鈥� explained co-founder听Dr Ian Bartholomew.听
鈥淚t鈥檚 a highly accurate depth-measurement device with internet connectivity and fail-safes. It鈥檚 self-sustaining and storm-proof so it can weather almost anything.听
鈥淭he other half of听FloodFlash tech is the cloud-based underwriting platform we use, which gives brokers and customers direct access to FloodFlash quotes. That means people can access parametric quotes easily, removing the need for a expensive cast of experts.鈥�听
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Dr Bartholomew听is a听doctor of glaciology whose pioneering study of weather underpins how the cost of a given level of protection at a given site is calculated.听Rimmer, who met听Dr Bartholomew at Cambridge University, said his co-founder’s background gives the firm an extra edge when it comes to modelling and measuring floods for clients compared to competitors.听
鈥�Our job is all about quantifying and reducing uncertainty,” said Dr Bartholomew. “Based on the evidence that we have, what is the realistic range of what might happen? Is there anything we can do to narrow it down?
“Understanding how a system works is crucial to this: whether that鈥檚 simulating the dynamics of the Greenland Ice Sheet for my PhD, developing the algorithms that drive our pricing, or the language we use when discussing a case with a client.
“Our ability to remove uncertainty and communicate flood risk and insurance solutions with precision and confidence is one of the key ways in which we have gained the trust of our partner insurers, brokers and clients.”听
The idea for听FloodFlash came from a project the two founders – by then working for RMS, the world鈥檚 largest risk-modelling firm – undertook for the New York Metropolitan Transport Authority to find a better insurance solution after Storm Sandy flooded the New York subway network.听
“Like the millions that experience flooding every year, the MTA found it impossible to renew their cover after a catastrophic flood claim,鈥� said听Dr Bartholomew.听听听
鈥�We designed parametric triggers for the MTA whereby their cover would pay $200 million if water rose above a certain depth in the harbour, as it did during Sandy.鈥�听
Rimmer added: 鈥淭hat represented a bit of a light-bulb moment for us. Parametric insurance policies like these are typically very expensive but advances in data and tech are starting to make it a possibility for more people.听听
鈥淭hat was the inspiration behind听FloodFlash: the realisation that new applications of parametric insurance have the power to protect anyone from catastrophic flooding, regardless of their budget.鈥�听
FloodFlash, which employs 20 people and has raised 拢2.1 million to date, has expanded its broker network from three during an initial trial in 2018 to over 250 offices around the UK including partnerships with Aon, Gallagher, Lockton, Marsh and Willis.听
鈥淚an and I make it no secret that UK commercial flood risk is only the first step,鈥� said Rimmer. 鈥淚 want to take听FloodFlash听international so that we can make a real dent in the protection gap.听听
鈥淟ong term, our ambition is to use the same principles of fast, tech-based insurance to protect people from other risks.鈥�听