Skip to main content

Closing the $58bn flood insurance gap

Seven illustrated men are putting up colourful, striped umbrellas. They are all holding their umbrella in a different position and are at different stages of putting the umbrella up


Lloyd’s relationship with FloodFlash embodies the kind of product innovation that is needed to help businesses thrive in a world of increased urbanisation and climate change. The rapid success of this award-winning MGA and Lloyd's Lab graduate is living evidence of how Lloyd’s purpose to support innovation can be used to improve resilience around the world.

In a world where catastrophic flooding is increasing in frequency, flood insurance premiums have become unaffordable for people and businesses in many high-risk locations. Some companies cannot secure cover at all. That’s where the unique partnership between FloodFlash and Lloyd’s fills the gap.

Through the Lab, Lloyd’s supported FloodFlash as they built a new type of parametric insurance cover for at-risk locations that uses a smart flood sensor installed at the insured property. Clients choose trigger depths for their cover and a corresponding payout amount. When the sensor detects flood water at the client's chosen depth it sends the data to FloodFlash HQ to automatically initiate a claim.

The benefits of this unique form of parametric insurance are many.  Most UK claims can be paid within 48 hours, (the fastest ever claim to be paid took just 5 hours and 36 minutes.) This is game-changing for the catastrophic flood insurance market, which is rapidly growing in size because of climate change, and where old-fashioned claims adjustment requires complex costings for reinstatement of damaged areas, and can often take months, if not years, to settle in full. A FloodFlash claimant from 2020 summed it up as being "without question the best insurance claim experience I’ve ever had, by some distance."

In partnership with Lloyd’s and backed by capacity from Munich Re, FloodFlash is poised to make a real difference to the previously intractable $58bn flood underinsurance gap – a number which does not show the financial consequences for businesses of lack of compensation for flooding and slow payment of claims.

The product that was developed also included further innovation around the flexibility of cover. Payment triggers are customised to fit each individual property’s own resilience levels and to take account of beneficial risk management tools, such as raised shelving storage units or flood defences. This unique form of parametric insurance thereby rewards resilient clients with more affordable premiums.

Since graduating from the third cohort of the Lloyd’s Lab, FloodFlash have continued to build out their portfolio of innovation. In 2020 they expanded their service to cover larger and more complex risks. Insurance buyers have responded enthusiastically to this new flood mitigation option.  As a result, earlier this year FloodFlash broke monthly GWP records and the company is currently planning for a US launch.

Watch our FloodFlash case study video: Paying claims in under 6 hours