Floodbase and Yokahu offer automatic quoting on parametric flood covers in New Orleans

By Henry Gale

April 24 - (The Insurer) - Parametric insurance specialists Floodbase and Yokahu have begun offering parametric flood insurance to businesses in New Orleans, covering losses not included in the National Flood Insurance Program (NFIP).

The coverage is backed by an AM Best A-plus rated carrier, the companies said in a statement, with Yokahu facilitating automatic quoting through its digital exchange cat-risk.com.

The facility pays claims based on flooding extent in New Orleans. If a certain percentage of the city's area is covered by flood water, as monitored by Floodbase, a payout is triggered. "New Orleans is a global tourist destination, but visitors, foot traffic and hospitality revenue all plummet when the region floods," the companies said.

Claim payments can be used to compensate for any economic loss experienced due to flooding, unlike under NFIP coverage, which only responds to property damage. The companies also said that the NFIP's cap on commercial payouts of $500,000 is often insufficient to cover damages.

Tim McCosh, founder and CEO of Yokahu, highlighted hospitality as a sector in New Orleans with the need for additional flood coverage and said the companies planned to offer similar coverage elsewhere in the U.S.

Yokahu announced the launch of cat-risk.com last month with the support of multiple brokers and capacity providers in the London market, offering limits of up to $5 million for risks such as hurricanes, typhoons and storms.

Floodbase closed a $5 million funding round in February. It uses satellite imagery and on-the-ground measurements to determine how much of an area is flooded as a trigger for parametric insurance transactions.