Imagine a world where insurance payouts are as predictable as the rising tide. In Freeport, Texas, this isn't just imagination—it's reality, thanks to a new approach to insurance.
Picture a warehouse owned by Postlane Partners in Freeport. Here, a mere 8 inches of floodwater triggers an automatic $3 million insurance payout from FloodFlash, a pioneering startup. Should the water reach 16 inches, the payout escalates to $5 million.
This isn't your typical insurance policy; it's a parametric insurance policy. The insurtech in question, FloodFlash, uses on-the-ground sensors that enable an automatic payout when a catastrophe occurs.
Owners of homes and businesses have watched with alarm as major insurance companies have stopped offering coverage in California, Florida, and other parts of the country prone to natural disasters.
Traditional insurance models, strained under the unpredictable nature of climate-related events, often find such risks too hot to handle. Enter insurtechs backed by cutting-edge tech, offering a solution where others see insurmountable challenges.
Here is another one: Kettle, an insurance startup that uses a type of artificial intelligence to understand how climate change affects risk and to sell property insurance accordingly.
Lessons Learnt: The secret sauce of these startups is that they are using better data science and incorporating artificial intelligence.
In an era where climate change is rewriting the rulebook on risk, AI + parametric + insurtechs = innovation. It's not just about managing risks—it's about redefining them.
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