Some facts about floods
The extreme weather events around the world this summer got me thinking, not only about how we address climate change, but also about how we adapt to the changes that have already occurred. According to the University of Bristol, flooding is the most common weather hazard worldwide. Annual economic losses from flooding amount to about $32 billion worldwide. It’s a problem that affects every continent and it’s only going to get worse.
Floods affect all segments of the population, but research clearly shows that disadvantaged communities are the hardest hit. According to the Swiss Re Institute, 83% of global economic losses from floods over the past decade were uninsured.
Floodbase is one of a growing number of Climate Tech companies: Companies looking to harness new technologies to help us reduce our carbon footprint or help us adapt to the impacts of climate change. Founded by a woman, this start-up is revolutionizing the insurance and flood mapping industry for homeowners, businesses and governments.
Floodbase uses technologies such as satellites to produce near real-time flood maps. This means that flood warnings can be issued much earlier than before. The Floodbase Platform is being or has been used by the United Nations, governments, and non-governmental organizations in 15 countries to improve flood disaster response. It also enables a paradigm shift in the flood insurance industry (more on that later).
Floodbase was founded by Bessie Schwarz (named one of Insider’s 30 Leaders in Climate Action last year) and Dr. Beth Tellman during their master’s studies at Yale University. Both had experience working with climate-threatened communities and saw firsthand how a lack of data in the face of climate change directly contributes to injustice and financial ruin. Schwarz describes himself as “first and foremost …. a community organizer” – she joined Green Corps after graduation and worked with Environment America. However, it recognizes that given the magnitude of the flooding problem, the only way to make a large-scale difference is to involve private capital. In January 2023, Floodbase raised $12 million in a Series A financing from Lowercarbon Capital with participation from Collaborative Fund, Floating Point and Vidavo.
The solution and effects
Floodbase’s technology offers data solutions that have the potential to fundamentally change the flood insurance industry. It will allow them to extend coverage under the parametric insurance model. This has two key advantages: It allows for much broader coverage of the effects of a flood, and it speeds up the payout process so that policyholders can receive payments in near real time. Peter Lacovara, Head of Commercial at Floodbase, puts it this way:
“When flooding occurs, many businesses are directly affected, not because the building has flooded, but because they rely on people to get into their stores and offices. And if people can’t get in their cars and drive down the street because the streets are flooded, they can’t go to the stores. Because all flood insurance is indemnity-based and really tied to property damage, parametric insurance is very good at insuring things that aren’t property damage, which makes it a fantastic complement to indemnity insurance.”
The payout is also much faster – in this model, the payout is triggered immediately, based on real-time evidence of flooding in an area from satellites and other technologies. This is in contrast to the traditional model, where payments are often made months after a disaster, exacerbating the plight of those affected.
Listening to the interview with Bessie Schwarz on the Climate Mayhem Podcast, you have no doubt about her determination to really make a difference on a large scale and help make our world more climate resilient. I hope she is successful.
Published 21 August 2023
Author: Jean Callanan is a strategic thinking consultant and sustainable innovation facilitator. She blogs about companies doing inspiring things to create a better world.
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About ‘Green Shoots – Stories from Business for our Planet’: Green Shoots is a weekly blog by Jean Callanan that shares stories of businesses and brands doing inspiring and innovative things to address #climatechange and create a better world.