Flood: new risk-based pricing capabilities, new opportunities to close protection gaps

Economic growth and urbanisation have driven flood-related losses higher over time, with climate change effects also shaping loss outcomes.

• Insured losses from floods doubled during 2011-2020 from the previous decade. Global flood losses in 2021 alone were USD 20 billion.
• There is a large flood protection gap. In 2021, just 18% of economic losses were covered by insurance.
• Once considered uninsurable, today new data and modeling enable risk-based pricing of flood risk. This is opening up a new market for private sector insurers, notably in the US.
• The insurance industry needs to invest more in modeling and risk awareness-raising initiatives to help close the protection gap.