Insuring Flood: Swiss Re and the Private Market Response

There’s been a lot of talk about the insurability of flood in the US and the need for the private market to take on more flood risk.

We’re ready to turn talk into action.

Swiss Re is here to help insurers go to market with high-resolution risk-based flood rating models, expanded flood coverages, and policy options that offer their customers, many of whom have never had flood insurance but desperately need it, affordability, flexibility, and peace of mind.

The compelling need

Only one in six homes in the US has flood insurance. Many people think they don’t need it, others assume their homeowners policy covers flood and still others think they can’t afford it. As a result of this underinsurance, an average year’s worth of storms will produce uninsured losses of USD 10 billion due to flooding, compared to insured losses of USD 5 billion.

A combination of other factors is making the crisis worse: torrential rainfalls, rising sea levels, more severe storms and the surge that comes with them, plus increased residential and commercial development in flood-prone areas.

We see a tremendous opportunity for the private market to deploy its knowledge and capacity to close the flood protection gap and create more resilient communities.

Our strategy is to allocate capital to minimize coverage gaps where the need is urgent and the outlook is positive. We’re optimistic about the future of flood risk and have invested in the tools and know how to take it on:

The model difference. A generation ago, we were limited in our ability to access the true flood risk for a location. Even when using the NFIP's flood maps, one could not determine the existing stark differences between risks within the same flood zones. Today, our fully probabilistic US flood model — combining detailed hazard, vulnerability, value distribution and insurance conditions — delivers exceptional risk information so the insurer can rate the risk on individual exposure and unique characteristics.

Whatever it takes. We’re equipped to add value at each step of the process — whether it’s developing high-resolution rates and accumulation controls, reviewing policy forms, educating agents, assisting with marketing, or offering claims expertise. Our team includes dedicated flood experts with focus areas in engineering and hydrology as well as underwriters, actuaries and claims staff.

Uniquely qualified. Our flood appetite is broad and robust, backed by world-class financial strength. That allows us to develop compelling client-driven products and service packages to deliver flood exposure products that help diversify a portfolio.

Customized solutions. With our reputation for scale, underwriting acumen and ease of doing business, we help insurers develop holistic flood coverage solutions that address customers’ needs.

Our capabilities are dynamic, meaning we can accommodate the needs of regional insurers or flex to the more expansive or complex requirements of national companies.

We offer:

  • Coverage for any type of flood peril such as river flooding, storm surge and inundation
  • Full multi-product offering: Treaty, Facultative/Swift Re
  • Nationwide appetite
  • Pro-rata & excess coverage
  • Indemnity, parametric and dual coverage triggers
  • Side-by-side, long-term partnership for personal or commercial lines

Working in partnership with Swiss Re, private insurers can launch their new flood product faster and with greater confidence, providing coverage consistent with a traditional insurance policy. Being in the business of risk, our clients can provide greater customization to homeowners on an individual basis. Plus, they already have distribution channels and policyholders to actively target.

Research shows that communities with insurance — no matter where it comes from — bounce back quicker from natural disasters. The US is poised for a breakthrough in securing flood risk and Swiss Re is ready to lead the charge. Call or write, and let’s start a discussion that leads to action.


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