(Image source: FloodFlash.)
FloodFlash (London), a parametric insurance technology company that pays catastrophic flood claims within 48 hours, has announced a Series A capital raise of $15m. The round was led by Chicago-based Buoyant Ventures with San Francisco fund Munich Re Ventures (MRV) featuring as both an investor and commercial partner. Sony Financial Ventures/Global Brain (Tokyo), MS&AD Ventures (San Francisco) and PropTech1 (Berlin) all participated in the round alongside existing investors Pentech, Local Globe and Insurtech Gateway.
The investment comes three months after FloodFlash announced a new insurance capacity partnership with MRV parent company Munich Re (Munich). FloodFlash says it plans to use the investment and capacity to fuel international expansion and begin closing the $58bn flood protection gap. Target markets include the U.S., Germany, Australia, and Japan.
FloodFlash identifies the U.S. as representing its biggest opportunity. According to the NOAA, inland flooding alone caused more than $151 billion in damages across the U.S. in the last 40 years. Despite the prevalence of flood risk in America, only 5 percent to 15 percent of homeowners, and fewer than 5 percent of small to mid-size businesses, carry flood insurance. This represents a massive opportunity for FloodFlash, which claims to have already made an impact on the U.K. flood underinsurance problem.
Launched in 2019, FloodFlash describes its coverage as combining computer models, cloud software and connected technology to provide flood cover to those the insurance industry has left behind.
Aside from broader availability, FloodFlash offers a simple way for customers to access flood insurance according to their needs and budget. Customers choose a depth and payout amount for their policy, and when flooding reaches the depth selected, the insurance automatically pays out, typically within 48 hours. During Storm Christoph in January 2021 FloodFlash reports that it paid a client in full 9 hours and 44 minutes.
“This investment is an endorsement of our parametric cover and how we’re using it to solve real-world issues,” comments Adam Rimmer, CEO, FloodFlash. “The group of investors for the round couldn’t be better tailored to supporting our efforts in solving the issues around underinsurance in the face of climate change.”
“Real solutions are needed to address flood risk in the communities on the front lines of climate change,” says Amy Francetic, partner, Buoyant Ventures. “We are thrilled to lead this first-class syndicate of investors and believe strongly that the FloodFlash team is well positioned for global expansion and success.”
“Parametric insurance is finally having its moment in InsurTech and we believe the FloodFlash approach will appeal to hundreds of thousands of companies in the U.S. and beyond,” comments Ben Bergsma, Investment Principal, Munich Re Ventures. “Successfully writing natural catastrophe parametric insurance is no simple task. FloodFlash’s holistic solution, which includes sophisticated building-level underwriting and monitoring as well as an intuitive cloud platform for brokers and agents, is a game changer that can operate at scale.”
Nikolas Samios, Managing Partner, PropTech1 Ventures says, “Constantly increasing climate-change induced risks are the dirty secret of the real estate industry. Everybody has them in her portfolio and regulation is getting tighter as we speak. Assessing these risks is therefore crucial for the build environment. FloodFlash has managed to develop a fast-growing business from that exact challenge. We are very excited to join the international consortium of investors and contribute the PropTech angle.”