Extreme climate occasions have gotten more and more widespread, and the demand for flood insurance coverage is rising in consequence, with insurers having to steadiness the added threat. GlobalData surveys discover that demand for flood harm to be lined within the US and around the globe could be very excessive, whereas Man Carpenter has warned of the ever- growing threat of flood harm as we head into 2025.
GlobalData’s 2024 Rising Tendencies in Insurance coverage Survey discovered that 61.4% of US shoppers stated that flood cowl as a part of family insurance coverage was both fascinating or very fascinating. This was barely lower than the mixed international common of 67.0% (boosted by very excessive scores in South Africa [84.4% combined] and China [77.7% combined]). Nonetheless, it nonetheless highlights the robust demand for flood harm to be lined within the US.
How fascinating is canopy for flood harm in private family insurance coverage coverage? The US, 2024
This can be a dilemma that family insurers must weigh up as they create insurance policies. Many areas of the world, and particularly the US, have gotten more and more high-risk and harmful for insurers to supply complete cowl to. They’ll and can enhance premiums, however inflation stays excessive in lots of nations—the US being one—and shoppers can not proceed to be squeezed. Man Carpenter additionally believes that beforehand low-risk areas will grow to be extra liable to flooding attributable to excessive rainfall, which is able to create extra areas the place insurers will look to restrict publicity.
The numerous demand for flood protection within the US and past signifies that insurers keen to supply it will likely be in a position to enhance retention and penetration charges. For insurers, it’s a case of balancing threat and assessing how a lot potential flood harm publicity they need to tackle. Insurers seeking to capitalize on this could look in direction of preventative measures, akin to ensuring properties are as ready as potential and offering superior climate warnings to clients.
