Neptune Flood will become one of the first private insurers to offer flood insurance to businesses early next year.
The St. Petersburg-based insure-tech company, which taps advanced computing power to evaluate and price flood insurance policies, will launch a commercial flood insurance product in January, Trevor Burgess, president and CEO, said in an interview with the St. Pete Catalyst.
The company also is building an insurance policy management system that will launch in parallel with the commercial insurance product. Renovations will get underway next month on Neptune’s new headquarters – a former medical office in downtown St. Petersburg – with plans to move into the site in the spring.
There’s a shift in the C-suite as well. Burgess, who was president and CEO of the former C1 Bank in St. Petersburg, had served as chairman of Neptune since becoming the majority shareholder two years ago. A few weeks ago, Burgess switched roles with founder Jim Albert, who had been Neptune’s CEO.
“Jim’s passion is about evangelizing the need for Americans to buy flood insurance. He also is passionate about Neptune and its brand and helping expand that across the U.S.” Burgess said. “I’m an experienced operating CEO and when we looked at what we wanted to accomplish in 2020, we looked at each other and said, we don’t need to go out and find someone else. We have the people right here in our leadership team, let’s just switch roles and then we will each be focused on the things we are strongest at.”
Climate change has brought an urgency to the company’s strategy.
“Currently there are five million flood insurance policies in the U. S., but the scientific data tells us that upwards of 62 million homes are at risk of flooding. There’s a huge coverage gap that exists,” Burgess said. “A lot of what Neptune and Jim Albert are focused on is helping to educate Americans about the need to protect their most important asset, which is their home, from the risk of flooding.”
Anyone who lives in a high-risk flood zone is required to buy flood insurance if they have a mortgage on their home. The same requirement holds true for businesses that are in a high-risk zone and are getting a Small Business Administration loan on a building.
While there’s enormous opportunity in flood insurance, it’s also a tough sell. Historically, the National Flood Insurance Program was the only source for polices, and the NFIP’s complicated process can take up to two weeks. The mandatory nature of the product annoys some consumers, and many government maps showing flood zones are outdated.
Neptune is one of a growing number of private insurers.
Neptune uses technology to take a different approach than that of the NFIP.
“We use tremendous amounts of big data and tremendous amounts of computing power to allow price discovery, to allow someone to figure out what their price for flood insurance would be by doing something as simple as just inputting their address,” Burgess said. “We ask you to tell us a couple of elements about your house to confirm the data we have … but very simple, intuitive questions for the consumer to answer. And we give you a price, and it’s a price you can buy then and there on the spot in less than two minutes.”
Neptune uses proprietary data it has developed, collected and analyzed, as well as data points it has purchased, for its decision-making engine, called Triton. The company filed a patent application for Triton last month.
“Triton allows us in a digital way to do what most insurance companies do with humans. We make the decision are we going to offer insurance or not, and we determine the price, and we can do that instantaneously, rather than having a human underwriter look at the file and look at pictures and the application and then make the decision,” Burgess said.
The process has resonated with both consumers and insurance agents. In January 2018, when Neptune was in a beta phase, there were about 50 customers. As of Dec. 19, the company had 21,000 customers, and 2,500 insurance agents had used Neptune to buy a policy.
Neptune currently offers residential flood policies in Florida and 37 other states, and expects to enter Louisiana and Illinois early next year. It will launch its commercial flood insurance in four states, including Florida, and then catch up with its residential footprint.
Inventor at heart
Burgess is an inventor at heart, with a dozen patents or patent applications. He got his first taste of innovation when he worked as an investment banker at Morgan Stanley and his team developed a unique share-offering process when Chipotle separated from its parent company, McDonald’s.
“I caught the bug from there. What I’ve realized over time is that the way my brain works is I have 100 ideas a day. I try to keep track of as many of them as possible. When they are good, actionable ideas we try to put them into practice. Sometimes those things turn into inventions that are patentable, and sometimes you just will see them in our marketing or some of the ways we go about explaining our company to the public,” Burgess said.
When Burgess joined Neptune there were just a couple of employees, in addition to Albert. Now, there are 14, with more than half of them programmers and other technologists.
Burgess recently brought on Jean-Luc Eckstein as executive director. Eckstein previously worked at IT firms Tech Data (Nasdaq: TECD) in Clearwater and CDW (Nasdaq: CDW).
“If you think about it, what we do at Neptune is sell software,” Burgess said. “We happen to also be selling insurance policies, but we’re really selling software to insurance agents that allows them to connect their clients to the insurance product. So I thought by bringing in someone with such a deep technology and process background, it would help us in 2020 because we’ve got a lot of big projects we are working on. I needed a head of project management to make sure that we were driving towards meeting those goals.”
Burgess also is chairman of a real estate firm, TRB Development, which bought a former BayCare Medical Group office building at 400 6th St. S. in August for $1.6 million and is renovating it.
Neptune Flood’s headquarters will be on the second floor, taking about 3,000 square feet, while the 3,000 square feet on the first floor will be home to Lingr, an upscale casual eatery and bar planned by Jeffrey Jew, a friend of Burgess and an alumnus of Bravo’s Top Chef.“I’m very committed to downtown St. Petersburg and to the idea of St. Pete as an innovative, startup driven community. There’s so much to like – the arts culture, the innovation culture and the commitment to doing the right thing – I think that sets St. Pete apart,” Burgess said. “So much like we did with C1, where we renovated a section of the Times building, I thought we could something similar, taking an existing building and doing a renovation.”
The new office is across the street from The Royal, a 13-unit townhome development at 545 4th Ave. S. being developed by Salt Palm Development.
“What we’re excited about is this entire part of St. Petersburg is getting the investment [Salt Palm] is making, that we’re making, to help create this urban, walkable, livable, workable environment, where all of those elements can happen together in one place,” Burgess said at the Dec. 12 groundbreaking for The Royal.
Neptune also fits St. Petersburg’s Grow Smarter economic strategy, which focuses on high-growth businesses.
“Trevor has always been incredibly involved in the community, and so to have him back here with another business, employing people, paying a living wage, that’s a great thing,” said Mayor Rick Kriseman.