Introducing the 2023 FloodFlash magazine – US edition! This year, the magazine is all about our smart sensor. 80% of the world’s flood losses aren’t insured, and the problem is getting worse. With the help of our smart sensor, FloodFlash can provide cover to those at risk from flooding. In the first blog from the US edition of the magazine, we take a look at the flood risk in the US, and the attitudes of US businesses towards flood insurance.
During the past 12 months extreme weather has dominated the news around the world. The U.S. is no different. During the summer of 2022, there were five 1,000-year rainfall events across just five weeks. Later in the year, Hurricanes Nicole and Ian caused significant flood losses, with the latter responsible for over a third of the global flood losses in 2022.
Flooding remains the number 1 peril in the US. Population growth, urbanisation and climate change are all set to make things worse. According to research published in Nature, the number of people in the US exposed to flooding will almost double over the next 30 years.
It is America’s most frequent and expensive disaster. Flooding has cost US taxpayers more than $850 billion since 2000 and is responsible for 2/3 of the cost from all natural disasters.Flood Defenders
Despite the prevalence of flooding in the US, there is a significant underinsurance problem. The flooding during Hurricane Ian resulted in an estimated $10-17bn of uninsured losses, over half of the total losses. Worse still, insurance covered only one dollar in every 30 after the significant floods hit California in late December. This level of underinsurance leaves individuals, businesses and governments exposed to bills that can ruin lives and devastate communities.
Having established that flooding is an issue, we wanted to know more about attitudes to flood insurance products. We asked 500 US business owners that were worried about flooding whether they agreed the following statement: ‘It’s difficult to get affordable flood cover for my business property’. The chart below reveals their answers.
78% of those business owners agreed that they have comprehensive flood insurance. It’s clear a significant number are struggling with insufficient limits or no coverage at all. Perhaps that’s why 70% of businesses surveyed worry about flooding as a threat to their business continuity. Or why 73% worry about the impact flooding will have on their supply chain.
When it comes to dealing with the impacts of a flood, clean up and repair are only part of the problem. When we asked businesses the main costs they incurred from recent floods, almost a third of businesses experienced significant business interruption. This is often excluded in insurance policies, particularly within the National Flood Program.
Speed of claim and insufficient coverage issues topped the list when we asked business owners what improvements they would most like to see for their flood insurance. Luckily, they are open to the idea of technology in insurance with 84% of those surveyed saying they’d use more technology if it made the product better. That’s exactly where our smart sensor comes in…
Stay tuned to find out more about how the smart sensor works and why we believe it’s the best technology for parametric flood insurance.
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