Closing the flood protection gap by predicting flood vulnerability to damage for every house
Urban flooding is the fastest growing physical climate risk. Aggravated by urbanisation and climate change, floods are already impacting insurers' loss ratios, creating the need to price flood risk more precisely and granularly. While Nordic countries like Norway boast 100% flood insurance coverage nationally, the rest of Europe has significantly lower coverage, putting insurers and citizens at risk of not being able to deal with costly flood damages. Germany has 50% coverage nationally, while other countries like Italy and Spain have even lower coverage. For 100% coverage, flood insurance needs to be affordable for buyers, but also profitable for sellers in a competitive market, where it is challenging to differentiate on factors other than price and quality of customer service.
To help insurers maintain profitability, we developed a new approach to model flood risk for every building at a resolution of 1 x 1 meter. We started by analysing thousands of historical flood claims which we have received from our insurance partners. We developed our product with Fremtind, Norway’s largest home insurer. We are combining these claims into ML models with geo-science data: For every building we analyse more than 600 parameters from geology and hydrology. This gives a unique assessment of the likelihood of a building to flood, but also its propensity to damage. This is crucial for our flood risk understanding, as we now see that areas which never flooded before, now are exposed.
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