London-based start-up, FloodFlash, is attempting to close the protection gap in flood-risk homes by targeting high-risk customers with technology to provide a seamless claims process.
Flooding has long been a key issue for the insurance industry, with $50bn of losses caused by floods around the world, according to Tech Crunch.
Go deeper with GlobalData
This looks unlikely to change in the UK, with the first quarter of 2018 seeing two major weather events in the ‘Beast from the East’ and Storm Emma.
One solution to easing the burden of insuring flood-risk homes was the creation of Flood Re in 2016, with BIBA launching a version for small businesses later in the same year.
Flood Re is effectively an agreement between leading insurers and the UK government to pool a pre-agreed amount which can be used to pay out claims in the event of severe weather conditions.
FloodFlash
This has helped to reduce sudden costs, but customers susceptible to floods still face higher premiums and may even struggle to find cover at all. It also hasn’t been able to deliver the same tailored, modern, policies as start-ups are offering.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataFloodFlash targets individuals and small businesses at high risk of flooding. It received £1.9m in funding in August 2018 and will specifically target Carlisle to launch, before expanding across the rest of the UK.
FloodFlash’s defining feature is its water sensor, which automatically detects and triggers the pre-agreed claims payout if water reaches a certain level.
This could become essential from the customer perspective: making any form of insurance claim can be difficult, but searching for paperwork in a flooded house is particularly stressful.
Customers can choose the height they want the payout to be triggered at, meaning they can reduce the cost of premiums by only triggering a payout when the water reaches a certain level.
This means a lot of the work is done beforehand, with the customer and insurer setting out clear conditions that ensure the claims process is simple and efficient.
Attempts to mitigate flood risk will also help customers reduce premiums, as FloodFlash is looking to reduce traditionally expensive premiums as much as possible.
We noted last week how the motor industry is starting to turn its attention to simplifying and automating the claims process in a bid to improve customer satisfaction, and this is following on from that trend.
FloodFlash stands out due to its specific targeting of these at-risk properties, while its use of technology for detection and accelerated payouts should really appeal to property owners in coastal and riverside towns.
The trend within the insurance industry to hone in on reducing pain for customers in the claims process seems to be picking up pace, and flood cover is the perfect line for that advancement.
The main issue for these customers is the cost of premiums, so it is particularly interesting to see the sector’s attempts to lower premiums. Whether a balance can be struck between customers having the technology and being sufficiently covered at an affordable price remains the key question.
