LAS VEGAS, Sept. 22, 2022 /PRNewswire/ -- Flood events cause widespread damage worldwide each year, yet insurers need partners to reduce the threat flooding poses to life and property, a report released today by the Insurance Information Institute (Triple-I) stated.
"Risk transfer is just one tool in the resilience toolkit," said Sean Kevelighan, CEO, Triple-I, in the report, Stemming A Rising Tide: How Insurers Can Close the Flood Protection Gap. "Our understanding of loss trends and expertise in assessing and quantifying risk must be joined at the hip to technology, public policy, finance, and science. We need to partner with communities and businesses at every level to promote a broad resilience mindset focused on pre-emptive mitigation and rapid recovery."
Establishing a mindset focused on resilience and pre-emptive mitigation will require advances in two broad categories, according to Triple-I's report.
Data and Communication: A 2022 Capgemini Research Institute report found few insurers are currently on course to achieve climate resiliency even as improved data tools have increased insurers' comfort in covering flood risks. These tools are critical to unlocking new data potential and enabling more accurate risk assessments.
"Risk prevention based on data and behavioral science is at the top of the agenda for future-focused insurers," says Seth Rachlin, Global Insurance Industry Leader, at Capgemini, adding that insurers should "deploy IoT, cloud, artificial intelligence, and machine learning," to improve risk management, develop products, transform claims processing, and enhance customer experience.
Collaboration and Innovation: Triple-I's paper cited Flood Re, a partnership between the U.K. government and insurers, as an effective way to install flood resilience measures. In the United States, community-based catastrophe insurance (CBCI) – arranged by local government or quasi-governmental bodies to cover individual properties – is being used, Triple-I's report noted.. Moreover, parametric insurance has been gaining traction with respect to weather- and climate-related risks. Instead of paying for damage, parametric insurance policies pay out if certain conditions are met.
The Triple-I report's release came on the same day Kevelighan is moderatiing a panel discussion on Innovation Solving for the World's #1 Climate Risk—Flood here at the InsureTech Connect 2022 conference at the Mandalay Bay Resort and Casino. Joining Triple-I's CEO this afternoon are four leading industry experts on flood risk:
- Christina Colby, Chief Customer Officer, Guidewire
- Seth Rachlin, Global Insurance Industry Leader, Capgemini
- Adam Rimmer Chief Executive Officer and Co-Founder, FloodFlash
- Raghuveer Vinukollu, Senior Vice President, Climate Resilience and Solutions Lead, Munich Reinsurance America
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SOURCE Insurance Information Institute