Report Suggests Ways to Address Flood Protection Gap

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Torrent Technologies, a Marsh affiliate, discusses many issues connected with flood insurance in its 2022 State of Flood Report: Ready to Lead the Way to Resilience. A major consideration is the need to reduce coverage gaps when it comes to recovering from flood damage. Guy Carpenter and Marsh are both businesses of Marsh McLennan.


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The report discusses the major flooding event experienced in Florida in the wake of Hurricane Ian, mentioning that more than 80% of Florida households are uninsured for flood damage. Solutions to close the protection gap include accelerating the development of private flood insurance, developing programs for community-based catastrophe insurance (CBCI), increasing resilience in our infrastructure and communities, and presenting options such as private excess flood insurance and parametric solutions.

Reinsurance is backed by capital market investors and helps better manage the NFIP’s financial risk. Reinsurance provides needed assurance that claims will be paid.

Private flood insurance can offer options that make purchasing flood coverage easier and more attractive. Each property that obtains flood coverage in the private market is a risk the NFIP and US taxpayers do not have to bear. The private market offers the possibility for innovation and products to further close the flood insurance gap.

Parametric solutions employ a measurable index with predefined triggers that can pay out once those metrics are reached. Parametric insurance could apply to flood risks through an index of rainfall during a specified time period, measurement of standing water in the covered locations, or the use of satellite imagery.


2022 State of Flood Report

Leading the way to resilience.