The Risks of Hazard

I recently wrote a blog about how the future of underwriting software is now, exploring this AM Best video. One of the things that stood out was that underwriters are going to be more responsible for building and managing their sales pipeline. This is particularly prescient for those underwriting non-NFIP flood insurance because of the impending rush into that market – building strong portfolios will be extremely important because those portfolios will represent an insurer’s initial position in the market. As early adopters turn into the full industry’s arrival, competition will be fierce* for good risks. Differentiation will be necessary for success. (* it will probably be fierce, but not necessarily…but that’s another blog).

The main source of differentiation for an insurer is going to be the flood risk analytics they use. Ideally, those analytics will be based on their own experience, data, and expertise because when everyone uses the same models it is more difficult to differentiate. Quality of the insurance coverage will also quickly distinguish the players.

Two weeks ago, I wrote a post that explored the May 2015 Houston floods and suggested some lessons that might be offered by the events. This topic attracted a large audience and generated a lot of questions and discussion. In my conclusion, I suggested that carriers might consider creating a flood analytic specifically for this city.

With Tropical Storm Bill currently bearing down on Texas, today I will take a closer look at how a carrier or underwriting group could use Intermap's risk assessment software, InsitePro, to build a new analytic to handle "Houston Flood" as a distinctive peril.

One of the keys to understanding flood risk is understanding the nuances of the type (or types) of flood you face. Why? A flood’s a flood, right? Wrong. There are several different kinds of flood, and each one bears a different impact in terms of how it occurs, the damage it causes, and how it is forecasted. Here’s a crash course on three common types of flood to help you better assess your risk.