Parametric pilot targets New York City flood assistance

A parametric insurance pilot program has been launched in New York City to provide rapid assistance for low-and-moderate income communities affected by flooding.

The program, led by Swiss Re Corporate Solutions and Guy Carpenter, responds to triggers based on a mix of satellite information, on-the-ground sensors and social media images, compiled by natural catastrophe data company ICEYE.

“This historic program will bring critical financial support to low-income households and help the city respond decisively to flood events,” ICEYE Global Head of Government Solutions Andy Read said.

“This partnership represents a cornerstone step in the right direction as we seek to address a growing flood protection gap.”

Once a flood happens, Swiss Re Corporate Solutions and ICEYE will determine the percentage of each neighbourhood that falls within the affected area, and if triggers are met, the insurer will issue a payment to the Center for NYC Neighborhoods (CNYCN).

The “learning pilot” will provide up to $US1.1 million ($1.7 million) in emergency funding, with qualifying households able to receive grants of up to $US15,000 ($22,712) from CNYCN within days of a major flood.

“With the increasing frequency and severity of adverse weather impacting communities, it is crucial that we take steps to protect the most vulnerable,” Guy Carpenter Head of Public Sector North America Jake Clark said.

“Guy Carpenter is honoured to be a part of this important solution and we encourage other communities to use these approaches as a component of disaster risk management efforts.”

The pilot was developed in partnership with CNYCN, the New York City Mayor’s Office of Climate & Environmental Justice and the Environmental Defense Fund (EDF).

“New models of disaster finance are urgently needed as the world has been too slow to adopt strong climate policies, driving up the risk of weather-related extremes,” EDF Associate Vice-President for Economics and Policy Carolyn Kousky said. “Innovation takes collaboration, and ultimately, we achieve more when we work together.”