Extreme climate occasions have gotten more and more widespread, and the demand for flood insurance coverage is rising because of this, with insurers having to steadiness the added danger. GlobalData surveys discover that demand for flood harm to be lined within the US and world wide may be very excessive, whereas Man Carpenter has warned of the ever- rising danger of flood harm as we head into 2025.
GlobalData’s 2024 Rising Developments in Insurance coverage Survey discovered that 61.4% of US shoppers mentioned that flood cowl as a part of family insurance coverage was both fascinating or very fascinating. This was barely lower than the mixed world 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 sturdy 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
It is a dilemma that family insurers should 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 will and can enhance premiums, however inflation stays excessive in lots of international locations—the US being one—and shoppers can’t proceed to be squeezed. Man Carpenter additionally believes that beforehand low-risk areas will change into extra susceptible to flooding on account of 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 danger and assessing how a lot potential flood harm publicity they need to tackle. Insurers trying to capitalize on this could look in direction of preventative measures, corresponding to ensuring properties are as ready as potential and offering superior climate warnings to prospects.
