Note, this is a reprint from Torrent Technologies, a leading flood insurance service provider.
In the past four years, flood-related losses from a string of catastrophic events — including 2017’s terrible trio of hurricanes, Harvey, Irma, and Maria, and the Mississippi River floods in 2019 — have shown that insurance plays a vital role in helping individuals, businesses, and communities recover from disasters. There is an urgent need for more flood insurance protection in the US. With Harvey, it is reported that only 17% of homeowners in the eight counties most affected by the hurricane were protected with flood insurance. Data suggests only 15% of Americans have a flood insurance policy, leaving an alarmingly large percentage of consumers exposed to flooding without protective coverage.
Steps for US Flood Resilience
- Extend the National Flood Insurance Program (NFIP).
- Reauthorize the NFIP long term and reform the NFIP.
- Address socio-economic issues of flooding in the US.
- Establish easy and simplified flood insurance options.
- Continuously reinforce resilience efforts to proactively address climate change.
- Use technology for property-level flood risk scoring and claims handling.
Actions to Begin Taking Now
As innovative technologies continue to improve the understanding of flood risk, the potential for a robust private flood insurance market worldwide keeps growing. To promote greater access to flood insurance and to improve flood protection, the following recommendations are proposed, for governments, regulatory authorities, and the insurance industry:
Simplify the process. Make it easy for agents to sell flood insurance and for individuals and businesses to purchase flood insurance. Establishing mitigation programs that are equitable, agile, and uncomplicated allow more people to get protection.
Amplify resilience. Build new structures with flood resilience in mind, and retrofit existing structures to be more resilient.
Share flood risk data. It is important for governments, emergency management agencies, and the insurance industry to learn from other countries’ approaches.
Explore public/private partnerships on managing flood risk. Combining the strengths of a government-backed program, such as the NFIP, and private-sector risk analytics can lead to solutions that protect individuals, businesses, and communities from the impact of floods and relieve some of the costs of disasters borne by taxpayers.
Promote awareness of flood risk and continue resilience efforts. As people and businesses realize their potential exposures, they may be more likely to adopt resistance and recoverability measures for greater resilience.
Continue innovations in flood-related technology at the individual property level. In addition, visual intelligence technology can facilitate instant loss assessments, accelerate payment of claims, and inform post-event repair decisions to make individual properties more resilient.
Parametric solutions. Parametric insurance is becoming more common around the world in protecting various industries from catastrophe and weather-related losses.
Actions Torrent is Taking
As part of our commitment to closing the flood insurance gap in the US, Torrent is:
- Employing technology for exceptional customer experience for positive flood insurance outcomes. Torrent is in the process of releasing a new policyholder portal and has private flood insurance integrated within the quoting platform for more personalized, property-level protections.
- Curating a private flood portfolio. Strategic flood insurance designed for commercial and residential properties are part of Torrent’s growing network of built-in products available in the flood insurance quoting portal.
- Building resiliency. Torrent is paving the path for proactive engagement within the public and private sectors that is necessary for a US flood resiliency practice.
The COVID-19 pandemic has reinforced the critical importance of a plan and actions to prepare, recover, and mitigate to protect people and property from the devastating effects of flood. Now is the time to work together to close this flood insurance gap.