Amwins and Floodbase launch parametric flood insurance for Californian municipalities

Amwins, a London-domiciled global speciality distributor, in partnership with insurtech Floodbase, has launched a municipal flood insurance program, designed to insure California municipalities against previously uncovered losses due to atmospheric river flooding.

California’s public sector has been largely unprotected from damages caused by atmospheric rivers, which annually on average cost the state more than a billion dollars. This leaves communities, critical facilities, and municipalities to cover damages or be subject to lengthy adjustment periods when losses occur, driven by the lack of viable existing insurance options, Amwins explains.

The atmospheric phenomenon can transport the water volume of the Mississippi River by 15 times, last year, this costs California between $5 billion and $7 billion in damages. Now, due to climate change, annual damages from atmospheric rivers are projected to increase, with exposures expected to double this century.

For the last 20 years, federal support covered less than 1% of the economic losses from atmospheric rivers, and many of these funds have yet to be obligated to localities on the ground.

With this launch, Amwins and Floodbase aim to close the insurance gap with policy payouts that automatically scale with the magnitude of atmospheric river flooding, and has already generated bound coverage from California public sector clients, as municipalities have replaced a portion of flood coverage with the new parametric product.

The program offers rapid access to capital that municipal governments can use at their discretion to fund emergency response, offset lost tax revenue, establish residential rebuilding programs, or repair public infrastructure.

Alex Kaplan, Executive Vice President, Alternative Risk, Amwins, commented: “The California atmospheric river season runs from November through March and is fast becoming just as costly as the North Atlantic hurricane season or Midwest tornado season.

“Economic loss due to flooding decreases tax revenue and affects every sector and industry, from city budgets to banking, agriculture, and tourism. Our program with Floodbase brings much-needed coverage and stability to local governments in a state which insurers have been leaving.”

Bessie Schwarz, Chief Executive Officer, Floodbase, added: “Public sector leaders across California recognize the growing threat of atmospheric rivers, and understand the dire financial position that municipalities can be left in following a flood. These annual storms have essentially become the west coast’s hurricane season.

“This program delivers fast, flexible funds that can be deployed as needed immediately following a flood – the type of economic backstop that was just not available before.”

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.