FLOW is designed to help customers dependent on river traffic

Water levels are tricky. Too high and the river floods; too low and you have a drought. And for companies that depend on rivers keeping their supply chains uninterrupted, every snowfall or lack thereof could mean potential loss of revenue.

With those customers in mind, we launched a parametric water-level insurance product, FLOW, three years ago. This is a data-based solution that helps protect companies from extreme water level fluctuations. Head Innovative Risk Solutions EMEA Jan Bachmann sat down with La Tribune de l’assurance to describe the product in more detail. His interview is below.

FLOW was introduced to the market in 2018, following severe droughts in Germany. Today, have you expanded the coverage area to other rivers and countries?
Indeed, we realized that a lot of our customers would benefit from an efficient and responsive water-level product. Parametric insurance, with its transparent setup and clear triggers, has proven to be effective in helping customers reduce protection gaps after in a NatCat scenario like a flood or a drought.

Today, we are able to help customers with locations in France, Germany, Italy, Eastern Europe, Russia, South Africa. The key point is to have reliable data – real-time and historical – that will allow us to structure appropriate coverage. That is usually the case in Europe.

Who is FLOW for? What type of companies should consider it?
Any company that depends on river traffic in their supply chain, upstream or downstream from their location, could potentially be impacted by water level fluctuations. River tourism companies, large cities with major rivers running through them and potentially causing disruptions to rail and road traffic in case of flooding. Marinas and docking stations is another example.

The insurance agreement is set for three years. Do the parametric triggers remain the same for the entire time? And how are they determined?
Similar to other parametric products, FLOW is based around the intensity of a water-level event. This way, we are able to guarantee a limit and a set premium for the duration of the policy, and our customers get the contract certainty they appreciate. When the policy ends, the customer has a choice of renewing or not, like any other insurance. Our triggers are built around reliable third-party data, most of it public, provided by known, trusted sources. The data determines the threshold – a parameter – that needs to be exceeded in order for the policy to kick in. It is a transparent structure and the customer knows exactly what to expect.

Interested in parametric water-level insurance? Lear more about FLOW.