Corporate Flood Insurance: A Parametric Response to Flood Risk in the United Kingdom

As flood in the UK is projected to rise, businesses fall short of adequate corporate flood insurance 

When compared to other Nat Cat perils, flood remains significantly under-insured in both emerging and mature markets that do not provide adequate corporate flood insurance. As public budgets contract and capacity continues to shrink in the world’s most flood exposed regions, including the UK, a number of corporates are left unprotected. Though significant investments have gone into building flooding defenses across the UK to safeguard the properties, as many as 40% of businesses do not reopen after experiencing devastating loss due to flooding. 

Flooding not only causes property damage, but also leads to non-damage business interruption such as reduced sales volume due to loss of attraction or denial of access especially when the authorities shut down buildings or whole areas. These circumstances incur additional costs for businesses to recover from the damage and in the extreme, keeps them from reviving ever again. However, with the continuous hardened market, this non-damage business interruption is prevalently excluded from insurance policies, leaving corporate clients at risk of flood without proper coverage. 

Flood risk in the UK is expected to rise with the climate getting warmer, and extreme rainfall from an event that happens every two years in the summer is projected to increase by approximately 25%. As a result, surface water flooding will become more frequent and more intense, especially in urban areas. As these trends continue, so does the widening gap of the traditional market. To address the limits of traditional insurance, Descartes offers bespoke parametric cover against growing flood risks. 

Descartes’ parametric flood insurance offers bespoke, transparent and rapid protection for corporates 

Using a data-driven method, Descartes’ corporate flood insurance monitors and analyzes evolving risks exposures in near real-time with satellite data or IoT. Once the policy is triggered, pay-out is executed promptly without lengthy loss adjustment procedures so that corporates can build resilience and have quick recovery time. 

Fill out the form to download our report on flood exposure in the UK and learn more about how Descartes’ parametric solutions for corporate flood insurance can help fill the gap left by traditional capacity.