Ag Guard, Floodbase partner on parametric cover in Australia
Agricultural underwriting agency Ag Guard and insurtech Floodbase will together offer parametric flood insurance programs across Australia and New Zealand from early next year.
Parametric solutions can help close the flood-insurance gap, says New York-based Floodbase, which monitors the risk globally for insurers and government agencies, and provided Ag Guard with the data and expertise to design the new national parametric programs.
New Zealand's remote terrain results in prohibitively long and expensive claims adjustment, Ag Guard says, making it difficult to structure profitable indemnity flood insurance schemes.
“Without government intervention or a new approach to flood insurance, economic loss will continue to wreak havoc across the region.
“Our offering will enable New Zealand farmers to purchase flood covers that were previously unavailable, drastically reducing the risk of insolvency and agricultural instability,” Ag Guard Co-owner and MD Alex Cohn said.
“We couldn't be more excited about the opportunity to complement indemnity insurance, help close the flood insurance gap, and bring comparable programs to Australia.”
The jointly developed parametric flood solution offers flexibility and rapid payouts without lengthy claims adjustments.
The programs will offer region-specific pricing with payouts triggered automatically when the magnitude of flooding exceeds predetermined thresholds.
The pair say this enables reliable, large-area cover, providing protection against flood-induced economic loss and significantly mitigating the impact of flooding, insuring “previously uninsurable” flood risk, and “fostering resilience across the ANZ region” after record flood claims costing billions in recent years.
Ag Guard provides specialised crop and farm insurance underwriting Australian farmers, and is expanding its offer across New Zealand as well from next year.
Floodbase says its historical data and near real-time flood monitoring makes it possible to cover against previously uninsurable economic loss from the peril. It was recently selected from more than 150 applications to join the latest Lloyd’s Lab cohort.