Key Takeaways:
- Parametric Flood Insurance: Floodbase and Ag Guard are joining forces to offer parametric flood insurance programs in Australia and New Zealand, addressing the ANZ flood insurance gap.
- Rapid Payouts with Predetermined Triggers: The new programs will offer rapid payouts without requiring lengthy claims adjustments using predetermined flooding thresholds.
- Region-Specific Pricing: The joint venture aims to provide region-specific insurance, benefiting farmers and governments by guarding against agricultural risks and flood-induced economic losses.
- Supporting Farm Stability: With these programs, farmers in New Zealand and Australia will gain access to previously unavailable flood coverage, thereby reducing risks of insolvency and agricultural disruption.
- Floodbase’s Global Reach: Built on robust science and extensive flood data, Floodbase offers near-real-time flood monitoring, ensuring large entities are protected from previously uninsurable flood-induced economic losses.
Over the past decade, New Zealand has faced multiple devastating flood events, with Cyclone Gabrielle in 2023 being the most severe of this century. Along with these catastrophic events, the floods in 2021 affected both the North and South Islands, resulting in emergency evacuations, states of emergency declarations, and agricultural disruptions. The aftermath required the Ministry of Agriculture to provide financial assistance to farmers in dire need.
One of the significant challenges confronting the region is the increasing frequency and intensity of these flooding events. These not only drive the Property and casualty loss ratios skyward but also highlight the urgent need for creative insurance solutions. Moreover, New Zealand’s unique topography presents another challenge: the lengthy and costly claims adjustment processes render traditional indemnity flood insurance schemes difficult to manage profitably.
Enter Floodbase and Ag Guard, two pioneering organizations looking to revolutionize flood insurance in the Australia-New Zealand (ANZ) region. Their newly announced partnership aims to develop and roll out parametric flood insurance programs, explicitly targeting agricultural risks. Unlike traditional indemnity insurance, parametric insurance boasts flexible structures and allows for faster payouts, completely bypassing the lengthy claims adjustment processes.
Launching in 2024, their joint initiative will offer region-tailored pricing. Furthermore, these programs will feature automatic payouts when flooding surpasses preset thresholds. Such a proactive approach promises to offer expansive coverage, ensuring both farmers and governments receive protection against agricultural risk and flood-driven economic devastation.
Alex Cohn, Co-owner and Managing Director of Ag Guard expressed his enthusiasm about the collaboration, “With Floodbase’s unparalleled flood data and expertise, we’re now equipped to design comprehensive parametric programs for the entire country. This partnership will empower New Zealand farmers with flood coverage options they didn’t have before, significantly reducing the threat of bankruptcy and agricultural turmoil.”
The merging of Ag Guard’s in-depth regional specialization and vast distribution network with Floodbase’s unmatched flood data promises to lessen the flooding impact considerably. This initiative not only ensures previously untapped flood risks but also strengthens resilience across the ANZ region.
Floodbase is renowned for partnering with insurance companies and humanitarian organizations, aiming to design, underwrite, and oversee parametric flood insurance products profitably. Their advanced solution consistently tracks flooding on a global scale. By pairing years of historical flood data with near real-time monitoring, they make it feasible to safeguard large business and public sector entities from previously insurable flood-induced economic losses.
Ag Guard, on the other hand, specializes in offering crop and farm insurance underwriting systems, along with support services to Australian farmers. They’re now expanding their services to New Zealand in 2024. Their commitment to innovation, agribusiness proficiency, and market-leading platforms makes them stand out.
Photo by Kelly Sikkema on Unsplash
