PRINCETON, N.J.--(BUSINESS WIRE)--Munich Reinsurance America, Inc. announces a new personal lines inland flood insurance product designed to provide more options for homeowners in low-to-moderate-hazard flood zones.
According to the National Flood Insurance Program (NFIP), flood is the most common natural disaster in the United States and all 50 states have experienced floods or flash floods over the past five years. However, many homeowners who live outside of Atlantic and Gulf coast areas do not have insurance coverage for flood.
Most homeowners insurance policies do not cover flood. Instead, flood coverage must be purchased separately through the NFIP. In low-to-moderate-hazard flood zones, the reported NFIP purchase rate is estimated at only around 1%, yet NFIP data shows those areas account for over 20% of NFIP claims and one-third of Federal Disaster Assistance for flooding.
“Our innovation around flood coverage is designed to address an underserved market, particularly given the increased risk of flooding due to more intense annual precipitation over the last decades,” said Steve Levy, President, Munich Re America’s Reinsurance Division. ”This product is an attractive alternative for non-coastal homeowners looking for competitively priced, lower-limit coverage to protect their homes and personal property. It is a first step into the private flood insurance marketplace, and one we are taking cautiously and deliberately.”
Munich Re America’s new Inland Flood Coverage Endorsement can be attached to a consumer’s existing Homeowners insurance policy purchased through a participating insurance carrier. Discussions with prospective carriers and state regulatory authorities are currently in progress.
“Average homeowners in a lower flood hazard area seek basic protection for their home and personal property at a competitive price,” said Tim Brockett, Munich Re America’s Senior Vice President, Reinsurance Division Strategic Products. “Our new Inland Flood Coverage Endorsement is designed to solve that need; it can be offered at lower limits and tailored to the underlying homeowners policy, thus eliminating the cost and administrative burden of a separate, stand-alone flood policy."
An independent research survey of insurance agents conducted for Munich Re in the US found that 78% of agents surveyed said this new Inland Flood Coverage Endorsement fills an unmet need that currently exists in the marketplace, and 81% said the coverage would appeal to consumers.
Full implementation services for insurance carriers that choose to offer the Inland Flood Coverage Endorsement will be provided by Hartford Steam Boiler Inspection and Insurance Company, an affiliate of Munich Reinsurance America, Inc.
Flood claims management services will be available through Specialty Insurance Services Corporation (SIS). SIS is an affiliate of American Modern Insurance Group® and Munich Reinsurance America, Inc.
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2014, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €3.2bn on premium income of over €48bn. It operates in all lines of insurance, with over 43,000 employees throughout the world. With premium income of around €27bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the leading insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2014, ERGO posted premium income of €18bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re’s global investments amounting to €227bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
Product and services provided by Munich Reinsurance America, Inc. and its affiliates. Any descriptions of coverage contained in this press release are meant to be general in nature and do not include nor are intended to include all of the actual terms, benefits and limitations found in an insurance policy. The insurance policy and not this press release will form the contract between the insured and insurance company, and governs in all cases. This press release is for information purposes only and is not intended to be legal, underwriting, financial or any other type of professional advice and the recipient should consult with its own advisors with respect to the information contained herein and its applicability to the recipient’s particular circumstances.