The NFIP has served a critical role in protecting Americans from flood risk. As of 2023, it covered more than 5 million policies (FEMA, 2023), and nearly 90% of U.S. natural disasters involve flooding (Insurance Information Institute [III], 2024). Yet despite the scale, many Americans remain uninsured. For example, over 80% of Hurricane Harvey victims had no flood insurance coverage (Wharton Risk Center, 2019).

FEMA’s Risk Rating 2.0 has introduced more actuarial, property-level pricing, leveling the playing field and inviting private market participation (FEMA, 2022). Simultaneously, consumer awareness of climate risks is rising, creating demand for affordable, customizable flood insurance products outside of traditional high-risk zones (CoreLogic, now Cotality, 2023).

Technology is the Great Equalizer  

Historical barriers to private flood participation, such as legacy systems, underwriting complexity, and regulatory uncertainty, can now be quickly overcome. Modern core systems like Solstice’s Equinox™ platform enable carriers to:

• Integrate real-time data for speed and accuracy
• Launch API-driven underwriting for faster quoting and binding
• Offer configurable, modular product designs for increased speed-to-market
• Adjust to regulatory changes at both the state and federal levels for easier compliance

No more “rip and replace.” With policy and claims admin platforms, like Equinox™, carriers can add private flood as a new product line with minimal disruption and maximum return on investment.

From Protection Gap to Profit Center  

Private flood is no longer just a complement to NFIP, it’s a growth channel. The market grew by 24% in 2023 alone (Reinsurance News, 2024), and insurers are using it to:

• Increase policyholder lifetime value
• Offer cross-sell potential with home, auto, or umbrella policies
• Build brand differentiation through innovation and agility

Why Now?

Climate risk is growing, the NFIP is evolving, and consumers are looking for options. Regulators have opened the door to private innovation (NAIC, 2023), and the technology is ready. The time to move from a compliance mindset to a competitive strategy is now.

Let’s Talk

Solstice Innovations is at the forefront of flood insurance modernization. Our platform gives carriers the speed, insight, and flexibility they need to move quickly and competitively.

Ready to close the flood protection gap and grow your bottom line? Let’s build something resilient together.

Note: This blog was written with the assistance of AI

References:

CoreLogic. (2023). 2023 Climate Change Catastrophe Report. https://www.corelogic.com

Federal Emergency Management Agency. (2022). Risk Rating 2.0: Equity in Action. https://www.fema.gov/flood-insurance/risk-rating

Federal Emergency Management Agency. (2023). National Flood Insurance Program: Policy and Claims Statistics. https://www.fema.gov/flood-insurance/statistics

Insurance Information Institute. (2024). Facts + Statistics: Flood Insurance. https://www.iii.org/fact-statistic/facts-statistics-flood-insurance

National Association of Insurance Commissioners. (2023). The State of the Private Flood Insurance Market. https://content.naic.org

Reinsurance News. (2024, January 12). Private Flood Insurance Market Grows by 24% in 2023. https://www.reinsurancene.ws/private-flood-insurance-market-grows-by-24-in-2023

Wharton Risk Management and Decision Processes Center. (2019). The Emerging Private Residential Flood Insurance Market in the United States. University of Pennsylvania. https://riskcenter.wharton.upenn.edu