21 August 2023
Floodbase – Climate Tech Addressing Flooding
The extreme weather events all around the world this summer set me thinking, not just about how we address climate change, but how we adapt to the change that has already happened.
Flooding is the most common weather hazard globally, according to the University of Bristol. The annual global economic losses from flooding are in the region of US$32 billion. It is a problem across all continents and is a problem that is only going to get worse.
Flooding hits all demographics, but the research is clear that disadvantaged communities bear the biggest brunt. They are also the ones least likely to be insured, and according to the Swiss Re Institute over the past decade, 83% of global economic losses from flooding were uninsured.
Floodbase is one of the growing number of Climate Tech companies: companies that aim to harness new technologies to help us reduce our carbon footprint or to help us to adapt to the effects of climate change. This female-founded startup is disrupting the insurance and flood-mapping industry for homeowners, businesses and governments.
Floodbase uses technology including satellites to generate near real-time flood maps. This means there can be flood alerts much earlier than previously and their Flood Intelligence Platform is being or has been used by the UN and governments and NGOs across 15 countries to improve flood disaster response. It is also allowing for a paradigm change in the flood insurance industry (more about this later).
Floodbase was founded by Bessie Schwarz (last year named one of the top 30 climate action leaders by Insider) and Dr Beth Tellman while they were studying as Master’s students at Yale University. Both had experience working with climate-vulnerable communities and saw firsthand how a lack of data directly contributed to inequity and financial ruin in the face of climate change.
Schwarz describes herself as being “first and foremost …. a community organiser” – she joined Green Corps after graduation and has worked with Environment America. But she is very clear that given the scale of the challenge of flooding the only way to have impact at massive scale is to have private capital involved. In January 2023, Floodbase raised $12 million in Series A funding from Lowercarbon Capital with participation from Collaborative Fund, Floating Point and Vidavo.
Floodbase’s technology offers data solutions that have the potential to be a game-changer for the flood insurance Industry. It will allow them to expand insurance coverage using the model known as parametric insurance. This has two significant advantages: it allows for much wider coverage of the impact of a flood, and it speeds up payment, enabling policyholders to receive near real-time payments. As Peter Lacovara, Head of Commercial at Floodbase put it: “When there is a flood, a lot of businesses are directly impacted not because the physical building flooded, but because they’re reliant on individuals coming to their shops and offices. And if people can’t get in their cars and drive down the road because of flooded roads then they cannot go to the businesses. As all flood insurance is done on an indemnity basis, and it’s really tied to physical damage, parametric is very good at insuring things that are not physical damage, which makes it a fantastic supplement to indemnity insurance.”
Payout is also much faster – under this model payout is triggered immediately, based on real-time evidence from satellite and other technology of flooding in an area. This contrasts with the traditional model where payment often comes months after a disaster, compounding the hardships suffered by those affected.
Listening to Bessie Schwarz interviewed on the Climate Mayhem Podcast one is left in no doubt of her determination to have real impact at a massive scale and to help to make our world more climate-resilient. I hope she succeeds.