Insurtech Sector Sails Over to Flood Insurance Category


We’ve written a bit about insurtech in the past, though surely not enough, as the category is booming.  Also, insurtech, in a way, has been around for some time now.  Think about eSurance which launched in San Francisco in 1999, and offered insurance direct to consumers over the internet. 

The sector has evolved over time, and now, tons of new insurtech startups are popping up all over the globe, many with very sector-specific directives, and advanced algorithms and analytics to help better manage risk and keep prices competitive. 

Florida-based HCI Group, which offers standard homeowners policies, has launched a separate online company – TypTap Insurance, to provide standalone flood insurance.  The firm is also looking to expand into 9 other states outside of Florida. 
(Cindy Taylor/Publisher)

“…While the insurer has been writing flood policies in Florida since 2013, HCI really ramped up its effort in April 2016. That was when HCI launched a separate flood-coverage only company called TypTap to sell standalone flood policies in Florida using a proprietary online platform for quoting and binding flood policies.

HCI is betting on its technology to help it capture market share. “The technology is the big thing,” said Mitchell. “It really hit a chord with agents.”

The TypTap technology makes it easy for agents to sell and property owners to buy flood coverage.  For potential customers, the process starts with them typing in their address. They only need to answer three questions and then pick an agent from a dropdown menu to finish the policy purchasing process.

The technology is important but TypTap also competes with NFIP on coverage and pricing. TypTap offers replacement cost on contents, no 30-day waiting period, and no elevation certificate. The coverage also offers a loss of use component, which isn’t available through NFIP policies, and up to $500,000 on the building limit and up to $250,000 on replacement and contents with underwriting approval.

According to Mitchell, TypTap can price its policies competitively because of its experience, its pricing models and perhaps most important because it does not have the burden of past losses from Katrina, Sandy and other storms which NFIP must surcharge policyholders to cover. NFIP is about $24 billion in debt.

“You have to be competitive,” Mitchell said, noting that HCI is “coming in with a fresh look at the peril of flood” and isn’t paying for Katrina or Sandy. “You’re not trying to surcharge the customer to make up for underwriting mistakes.”…

Source: Insurance Journal