The MGA is ’working to address the world’s largest flood insurance market’ says FloodFlash North America chief executive

MGA FloodFlash has extended its US capacity agreement with Munich Re to support the growth of the parametric insurtech.

Announced on 6 March 2023, the initial carrier partnership began with Munich Re supporting FloodFlash’s UK book of business in 2020.

FloodFlash chief executive for North America Mark Hara said: “In our US launch, we’re working to address the world’s largest flood insurance market.

“To meet our ambitious goals, we need to be partnered with the best. We couldn’t have better partners than Munich Re.”

The signing of the deal follows FloodFlash’s launch in the US on 1 March 2023, during a time when natural catastrophe reinsurance capacity was distressed in the US market.

Testament to the relationship

Munich Re estimate losses from the Atlantic storm season of around $110bn (£91bn) – including $65bn (£54bn) of insured losses – with hurricane Ian as the main contributor.

This has put huge strain on the natural catastrophe reinsurance market, with many MGAs and insurers now facing significant difficulties when renewing capacity arrangements, particularly in Florida and across the Gulf coast.

The MGA said this deal shows how parametric insurance can rise to the challenge of difficult market conditions and play an important role in insuring high risk businesses in a future characterised by climate change, urbanisation and more extreme weather.

FloodFlash head of major accounts and capacity management Richard Coyle said: “This new deal is testament to the relationship that we have built with the teams at our capacity providers and their faith in our parametric underwriting and sensor technology.

“A huge part of this faith comes from the certainty that parametric insurance can bring.

”We can establish actual losses from a flood event within 48 hours due to the pre-agreed payout amounts. [Losses] creep from claims inflation and litigation is therefore mitigated.

“Certainty around expected losses means we can price policies more fairly and capacity discussions are much easier as a result.”

  • Insurance Times has converted dollar amounts into pounds using an exchange rate of $1.21 = £1, which was correct as of 1 March 2023.

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