Bermuda-based reinsurer Hiscox Re, along with insurance linked securities investors (ILS), has launched a flood insurance product for personal lines insurers to sell in the U.S.

The turnkey flood insurance product, named FloodXtra, is designed to take advantage of the insurance gap once again made obvious by recent hurricanes Harvey, Irma and Maria in the U.S. and the potential for private market sales if Congress reforms the current government flood insurance program. Less than 12 percent of American homeowners have a flood insurance policy, according to an Insurance Information Institute poll taken in 2016, even though flooding is the most common natural disaster in the country.

The coverage is a sublimited white label endorsement that personal lines carriers can add to their own homeowners policies.

Private insurers have increasingly expressed interest in entering the flood insurance market that is now dominated by the National Flood Insurance Program. Americans have suffered billions of dollars in uninsured flood losses in years with storms. Congress has been weighing reforms that would make it easier for private insurers to sell the coverage.

“Recent events have highlighted the inadequacy of flood insurance provisions in the U.S. The market is deregulating, and the good news for consumers is this will give them a greater choice of flood cover,” said Bevis Tetlow, head of North American Underwriting. “FloodXtra is part of this solution, allowing our carrier partners and ILS investors to leverage our in-house flood analytics and proprietary technology, which in turn boost U.S. homeowners’ resilience to flood.”

The Hiscox Re coverage will be made available only for homeowners in moderate and low-risk flood zones (X, B, C and D zones) and not in the highest hazard zones.

The future of the NFIP is in flux. The program was $25 billion in debt before this hurricane season, and federal lawmakers face a deadline of Dec. 8 to reauthorize it. The Trump administration has proposed cutting back on coverage for new homes and for existing homes that repeatedly flood.

FloodXtra provides insurance carriers with rates, rules, forms, a ready-to-use underwriting portal and pricing system, and reinsurance. Hiscox Re is promising limits up to $100,000, flexible deductibles, competitive pricing and coverage that is broader than standard insurance coverage. Hiscox Re includes coverage not found in standard flood policies, such as additional living expenses, outbuildings and pool houses. An additional endorsement for water backup is also available. Home insurance policyholders need to answer only two additional questions to obtain a quote.

Other FloodXtra features Hiscox Re is highlighting include:

  • Fast and efficient underwriting portal providing instant location-level pricing.
  • Straightforward policy wording designed to dovetail standard home insurance products.
  • Quality claims experience for the insured—carrier partners own the claims process.
  • Assistance with form development, rate filing and underwriting platform integration.
  • Quota share reinsurance with up to 100 percent cession to Hiscox Re, client participation preferred.

FloodXtra is an expansion of Hiscox Re’s current flood risk portfolio. It already offers flood-specific excess-of-loss coverage to insurers and also FloodPlus, a nonadmitted Lloyd’s product available to homeowners across the U.S., which can be purchased as a standalone cover or in combination with other Hiscox products.