Global reinsurer Swiss Re has highlighted that parametric flood solutions that rely on data from multiple sources, including advanced sensors, will be key to its success, improving reliability, reducing underlying risk and increasing confidence.
Flood risk is one of the most common weather-related hazards, affecting nearly one-third of the global population. However, despite this, approximately 80% of flood losses remain uninsured, according to the Swiss Re Institute.
To address this protection gap, parametric flood insurance is gaining traction in both emerging and developed markets.
Parametric insurance eliminates the need for a potentially time-consuming damage assessment and instead automatically triggers rapid payouts when measurable flood conditions are met.
Swiss Re noted that a range of advanced data sources, from IoT flood sensors and satellite imagery to remote sensing and high-resolution flood models, have changed the way flood risk is measured.
However, reinsurers warn that relying on a single data source could create new vulnerabilities. Even approaches that appear promising may not work on their own, especially if they prove to be too costly to deploy.
To address this issue, a new publication from Swiss Re Public Sector Solutions explores how a mix of data inputs can help shape the future of parametric flood protection, improving reliability and increasing confidence in these risk transfer products.
The post Multi-source data key to success in parametric flood insurance: Swiss Re appeared first on ReinsuranceNe.ws.