Munich Re said it will work with an insurance industry non-profit to help close the flood insurance gap in the U.S. and creative potential incentives for a private market.
The global reinsurer’s partnership is with the American Association of Insurance Services, and both parties hope to provide elements that can help enhance policies and services for homeowners.
Serena Garrahan, Flood Product Manager for Munich Reinsurance America, said that the partnership with AAIS will help target homeowners in low to moderate risk areas that have often not had flood insurance protection.
“We are thrilled to work with AAIS on the development of inland flood coverage that can offer insurance carriers and their customers a way to help protect against the losses associated with this risk,” she said in prepared remarks.
John Kadous, vice president of Personal Lines & Auto, and Head of Product Strategy at AAIS, said that Munich Re will bring “tremendous flood insight and pricing data” to the effort, which will broaden in scope over time.
“Addressing flood coverage for homeowners is a key first step in a larger flood strategy for AAIS,” Kadous said in prepared remarks.
Munich Re and AAIS noted in their release that the flood insurance gap is rising in the U.S., as flood risks increase, particularly among homeowners outside major flood zones. But with the market dominated by the National Flood Insurance Program, they point out that there still isn’t a strong private insurance market. Their partnership is formed to incentivize insurers who might want to cover the flood peril.
Sources: AAIS, Munich Re