Swiss Re's new offering to change the economics of flood insurance
Zurich-based global reinsurer Swiss Re has teamed up with global consulting and actuarial firm Milliman to develop a new offering that will enable insurers to access a "low-risk flood product without incurring large upfront costs".
The new simplified product offering provides flexible coverage for low and moderate flood risks. It leverages Swiss Re's proprietary flood modeling for rating purposes and pairs it with customised policy forms developed by Flood Services Corporation.
The product is offered through Milliman Appleseed, a new advisory organisation, which significantly reduces the go-to-market time. Milliman Appleseed is licensed to submit loss costs, rating factors, and risk scores with state insurance regulators across the US.
Swiss Re said insurers can easily adopt its simplified product offering, avoiding extensive product development, reducing state-by-state regulatory costs and uncertainty, and accelerating their growth into more states.
"Offering Swiss Re's simplified flood offering through Appleseed changes the economics of flood insurance, a critical step to close the protection gap in areas outside of currently mapped floodplains, which are the least insured today," said Dave Evans, a consulting actuary with Milliman. "Insurers can now access a sophisticated, low-risk flood product without incurring large upfront costs."
Matt Junge (pictured), head property solutions, US & Canada, at Swiss Re, added: "This is an important step to further opening the door to the private flood insurance market in the U.S. This addition to our existing flood capabilities makes it easier and faster for clients to enter this space and protect more communities across the country from the financial impacts of flooding."
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