Jim Albert: Opening the Flood Gates to a New Wave of Data-Driven Flood Insurers

Rapid advances in data-driven technology and a precipitous rise in
catastrophic flood events in the US presented an opportunity for
this InsureTech startup

There are 62 Million homes at moderate or extreme risk of
flooding in the US, according to insurance risk assessment firm
Verisk.


Homeowners insurance does not typically cover flood damage and up
to 50% of homes in high-risk areas have no flood insurance at
all. This amounts to a serious problem, argues the founder of
InsureTech startup Neptune Flood Insurance Jim Albert in this
week’s episode of the Business of Data Podcast.


In the past, most flood insurance in the US was provided by the
National Flood Insurance Program (NFIP). Now, powered by
innovative technologies, nimble insurgent companies are shaking
up the status quo.


“The NFIP has done an exceptional job over the years, but as with
most government programs, technology has started to outstrip what
has happened within the flood space,” says Albert. “And so, what
I tried to create with Neptune when I founded it in 2016 was an
‘Amazon-like’ buying experience in flood insurance.”


“You can get one-click buying for virtually everything else you
do in life,” he continues. “So, we tried to make it easy to buy
flood insurance in the US through the use of data analytics and a
really simple online quoting platform.”


The game-changing, automated approach championed by Neptune Flood
Insurance was not without its skeptics. In 2016 when the company
was founded, the idea of digital insurance was even more
revolutionary than it is today.


“There was a lot of skepticism about digital insurance [back
then]. Could a digital model actually replace the traditional
back room full of underwriters?” Albert recalls. “[Especially]
when I explained that we don’t have any underwriters. In fact,
the underwriter is the computer.”


What sets Neptune Flood Insurance apart from its competition is
the speed that customers can get a quote and buy their flood
insurance online.


We’ve proved in the model at this point,” Albert says. “We pull
in about a hundred different data elements in one second when you
enter the address, and we do the full evaluation right then and
there.


The application of this technology could not be timelier. Not
only are flood events likely to occur more often in the US, but
due to the pandemic no-one wants to have an inspector in their
home, nor to wait weeks for an estimate.


Do [customers] want to sign on to a days or weeks-long slog to
finally get the information that they need?” Albert concludes.
“Or [do they] want to go to one site that has seemingly all the
information with a really good price and great coverage options?
That’s what we see happening.”
Key Takeaways


Many homes at high risk of flooding in the US are
uninsured. A lack of awareness of the risks is one
cause, but catastrophic damage can take years to recover from


Data has paved the way for a better solution.
 By pulling together data from a multitude of sources,
Neptune Flood Insurance can provide a policy in seconds


Hyper-personalization is on the way. Other
types of insurance companies will soon take advantage of
advanced, data-driven technology to provide highly personalized
policies to their customers