Neptune Flood, a flood insurance specialist that uses artificial intelligence technology to provide its products, is branching out into parametric insurance with the acquisition of California earthquake specialist Jumpstart Insurance Solutions.
Jumpstart launched a few years ago, offering a parametric earthquake insurance solution in the state of California only, with backing from reinsurance firm SCOR’s Channel Syndicate. We’re not sure who the capacity or reinsurance provider is today, although the company still uses Lloyd’s underwriters to bind its risks.
Now, Neptune, which has been growing quickly in flood risk, sees an opportunity to take Jumpstart’s product under its mantle and help to grow its uptake.
In addition, we’d imagine Neptune has an appetite to put its AI to work on trying to enhance the model and pricing of the parametric quake product.
“Neptune is excited to have Jumpstart join our team where we work every day to make flood insurance, and now earthquake insurance, easier to navigate,” Neptune CEO Trevor Burgess explained. “Broadening our reach to the earthquake peril and to parametric insurance more broadly will help us fulfill our mission to use technology to change the way that consumers buy, and agents sell, insurance. We want it to be fast, easy, and economical.”
“The team and I are thrilled for Jumpstart and Neptune to join forces,” added Kate Stillwell, Jumpstart founder and now President of Jumpstart Parametric Insurance at Neptune. “We share a vision to revolutionize catastrophe insurance and close protection gaps. This acquisition will accelerate the expansion of parametric and make coverage accessible to more people, through Neptune’s distribution and capacity networks. And flood risk is the logical next peril for consumer parametric, which makes Neptune a natural home for Jumpstart. Plus, we’re excited to be part of the success story for one of the fastest-growing startups in the industry.”
Jumpstart’s parametric insurance products payout based on earthquake intensity, rather than the cost of damage.
As a result, policyholders can receive payouts in a matter of days instead of weeks or months and there is no deductible, no adjusters, and no paperwork. Payouts offer up to $10,000 for individuals and $20,000 for small businesses.
Neptune will make Jumpstart’s parametric quake insurance available to its agent network in the coming weeks, the company said.
“Neptune’s agent force loves how simple we make it to buy insurance. Earthquake is a natural add-on to Flood Insurance as agents look to help their clients cover catastrophic risks,” explained Jean-Luc Eckstein, Neptune’s Chief Customer Officer.
Neptune branching out into parametric cover could be interesting if it makes a serious attempt to construct robust parametric flood insurance triggers, as this is an area that has significant opportunity, with the right models and pricing.
Water related insurance claims are increasingly a driver of frequency for the industry and pain for both homeowners and businesses, so parametric flood insurance products may be able to fill coverage gaps here and help provide broader protection, perhaps in combination with a traditional flood indemnity product as well.