FloodFlash is going to change flood insurance. By basing settlements on water depth rather than cost of damage, the company can eliminate the main reasons that cause insurers to refuse to cover those in the highest risk areas. Even better, by giving their customers the insights into how that price is calculated, FloodFlash makes it possible for policyholders to reduce their premiums by taking mitigating steps, such as lifting key equipment up off the ground. It means the company can insure those who fear they are uninsurable, and customers can get insured for less.
We were introduced to the founders of FloodFlash, Ian and Adam, via an email introduction. A coffee meeting and a couple of chats later and they were in the offices pitching their idea.
Ian says that when they arrived to pitch they were “two guys, 12 slides and a good idea.” He is spot on but they were much more than that. They were personally and academically experienced, with a decent amount of daring in them.
Adam told us how his parents were unable to get flooding insurance where they were living, but also how governments and large companies actually could get the flood cover they needed using an innovative new type of policy. Professionally it was clear they understood the statistical modelling of flooding. A pair of Cambridge degrees and a PhD between them only confirmed their understanding of the problems in the industry.
We learnt a lot from them, about flooding certainly, but also about what to look for in founders and ideas.
The thing is when you open your doors and your inbox as we have at the Gateway, you’re not entirely sure who will come through the doors. We didn’t have the words to describe what we were looking for before FloodFlash arrived. Now we do.
Ian and Adam could explain the scale of the underinsurance problem:
£50bn per year lost to flooding, and only £9bn of that paid out by insurers.
The expression “there is no such thing as an uninsurable product” came up in early meetings. We were talking of a brighter future, but with one foot firmly planted in what present data analysis allowed us.
Crucially, Adam and Ian understood parametrics, the part of insurance which deals with linking settlements to measurable, physical things like flood depth or wind speed. The use of data to nudge user behaviour change was what we had always suspected the future would look like.
Early meetings can only reveal so much, but it felt clear from the start that the pair would know how to respond to feedback, and we haven’t been disappointed. With age and experience has come maturity: they know when to ask, and they arrived with a good idea of what we could offer them.
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