COVID-19 has completely upended the way we do business. Everything from working to doctor appointments and family gatherings has become a contactless experience. The insurance industry, with dual shocks of event cancellation insurance and business interruption risk, has been hit with an event that wiped out the protections of global geographic diversification. The high losses are spurring an accelerated search for new markets and uncorrelated risks.
Property/casualty carriers would do well to look at the greatest greenfield currently existing in the insurance world: flood insurance. Still a nascent market dominated by the government’s National Flood Insurance Program (NFIP)—with a handful of private flood insurers splitting the remaining 10 percent of the market—the segment is rapidly growing. The immense market upside represents an opportunity for carriers to accelerate the digitization of their business models.