The Future of Parametric Flood Insurance:

Flood risk is among the most prevalent weather-related hazards, impacting nearly one-third of the global population. Yet despite being a near ubiquitous peril, roughly 80% of flood losses remain uninsured, according to the Swiss Re Institute.

To address the looming protection gap and build resilience, parametric flood solutions are gaining traction in emerging and developed markets. Instead of potentially time-consuming loss assessments, payouts from parametric insurance are triggered automatically when measurable flood conditions are met.

This raises an important question: How do you measure a flood's impact to trigger insurance payments – quickly, fairly, accurately and at scale – so that the purpose of the insurance policy is fulfilled?  

New sensing technologies may hold the key. From IoT flood sensors and satellite imagery to remote sensing and high-resolution flood models, an array of advanced data sources has transformed how flood risk can be measured.

Even so, relying on just one source of data may create new vulnerabilities. Even approaches that at first glance may seem the most promising may not work on their own, in particular if deploying them turns out to be too costly.

So, what combination of technologies can truly make parametric flood insurance work at scale? And how can experts who develop these risk-transfer products balance precision, reliability and cost when designing triggers for risks that can inundate entire regions at once?

A new publication from Swiss Re Public Sector Solutions explores how an approach that relies on data collected from multiple sources, including advanced sensors, could help shape the future of parametric flood protection. In The Future of Parametric Flood Insurance: Multi-Source Data Will Be Key to Success, our experts demonstrate why a blend of data inputs can improve reliability, reduce basis risk and strengthen confidence in these innovative risk-transfer products.

Discover what it takes to build reliable parametric flood solutions – and why an industry standard that integrates the right strategy based on the right combination of data sources can help these protection products scale more quickly – and build more resilience for those facing the risk of high water.