Previsico and Descartes partner on sensor / forecast based UK parametric flood cover

Real-time flood forecasting tech firm Previsico has partnered with specialist parametric MGA and insurer Descartes Underwriting to deliver a flood insurance product for UK commercial firms that features a trigger based on sensor data, warnings and forecasts of water depths.

Previsico leverages a sensor and technology suite to provide flood warnings and forecasts of flood depths, meaning this corporate parametric insurance product could pay out particularly quickly when a flood event is occurring.

The companies said that “lightning-fast claims payments” can be activated when Previsico’s internet-of-things (IoT) flood sensors trigger coverage under policies from Descartes.

Previsico’s on-site sensors and Flood Intel Platform forecast “the depth and duration of surface water and ordinary watercourse flooding up to 48 hours in advance for individual risks and continuously monitors local conditions, including water levels,” the company explained.

The partnership with specialist parametric underwriter Descartes will see the company bringing capacity to underwrite $70 million per policy to this partnership.

The policies will feature “unrestricted coverage for any tangible and intangible losses, and claims payments within just days of a flood event,” the partners said.

Given the use of forecast data and warnings for constructing parametric triggers for flood insurance, it’s interesting to consider that, in future, as technology continues to advance, we could see parametric products that pay out before the worst of a flood event even occurs, based on forecast water depths at specific locations.

We have seen forecast-based triggers before, but these have been for bespoke covers such as for El Nino forecasts, or droughts.

Steven Hayward, IoT Systems Manager at Previsico, commented, “Today, a third of commercial properties in the UK are at risk from flooding and it is estimated by FEMA that 40% of small and medium-sized businesses never reopen after they experience losses from a significant flood event.

“Our partnership with Descartes is a game-changer. It will provide businesses with our advanced flood warnings and ensure more organisations can potentially receive parametric insurance payments should the worst occur, enabling them to survive the financial impact of flooding.”

Alessandro Girelli, Underwriting Director, UK & Ireland, at Descartes, added, “Working with Previsico, we’re able to manage corporate flood risk in a simple, transparent and speedy way. We combine real-time data from Previsico’s sensors and public river gauges to underpin claims payments with a bespoke payout structure increasing with the severity of the flood. The arrangement enables us to support flood risk mitigation, with Previsico’s flood forecasts helping companies take action before floodwaters enter their premises.”

Vania Hernandez Bello, Innovation Project Manager at Descartes, said, “With increasingly problematic flood exposures in the UK and our commitment to helping clients become more resilient, partnering with a reliable local expert was essential. Collaborating with Previsico and their advanced flood sensor technology has been instrumental in enhancing our insurance product by enabling more accurate flood level detection.”

Tanguy Touffut, CEO, Descartes Underwriting, will join a panel session at our upcoming ILS NYC 2025 conference in New York, to discuss the parametric ILS investment opportunity. Register to attend here.