Amwins has partnered with Floodbase to create a new municipal flood insurance program aimed at addressing the growing financial risk posed by atmospheric river flooding to municipalities in California.
The partnership was driven by the increasing damages caused by atmospheric rivers, which previously left California’s public sector largely unprotected.
These storms, which can carry water volumes significantly higher than major rivers, have caused extensive damage, leaving municipalities to either self-fund recovery efforts or endure long insurance adjustment processes.
This new program closes the insurance gap by offering parametric payouts that automatically scale based on the severity of the flooding event.
Amwins is a specialist in distributing insurance products that address complex risks across industries. The company has a strong focus on delivering tailored solutions that address unique exposures.
Floodbase, on the other hand, specialises in parametric insurance products, specifically designed to provide quick, scalable payouts for flood-related losses. Their expertise in this field positions them well to assist public sector clients in mitigating the financial risks of extreme weather events.
The flood insurance program launched by Amwins and Floodbase provides California municipalities with rapid access to funds.
The parametric nature of the policy allows it to offer immediate payouts based on the magnitude of the atmospheric river, giving local governments flexibility to allocate funds for various needs, such as emergency response, infrastructure repair, or residential rebuilding.
This new program has already seen strong uptake, with several California municipalities replacing portions of their traditional flood coverage with this parametric product.
The innovation comes at a crucial time, as atmospheric river storms, which now rival the costs associated with other natural disasters such as hurricanes and tornadoes, are becoming increasingly severe.
“The California atmospheric river season runs from November through March and is fast becoming just as costly as the North Atlantic hurricane season or Midwest tornado season,” Alex Kaplan, executive vice president for Alternative Risk at Amwins, said.
In 2023 alone, atmospheric river storms caused an estimated $5bn to $7bn in damages. Federal disaster recovery funds covered less than 1% of these economic losses, leaving localities struggling to recover.
With climate change expected to double the exposure to such storms in the coming decades, this new insurance program provides a much-needed financial safety net for the public sector.
Public sector leaders in California are increasingly recognising the importance of preparing for the financial impacts of atmospheric river storms.
“Public sector leaders across California recognise the growing threat of atmospheric rivers, and understand the dire financial position that municipalities can be left in following a flood,” said Bessie Schwarz, chief executive officer at Floodbase. “This program delivers fast, flexible funds that can be deployed as needed immediately following a flood – the type of economic backstop that was just not available before.”
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