Guy Carpenter, Swiss Re and ICEYE have joined forces to test a parametric flood insurance program for New York City
ICEYE, Guy Carpenter and Swiss Re are participating in a parametric pilot program to protect low-income communities in New York City from flooding. These communities were among those severely impacted by Hurricane Sandy in 2012.
The program is led by Swiss Re Corporate Solutions and Guy Carpenter and is funded by the Civic Innovation Challenge of the National Science Foundation and the Department of Homeland Security.
The pilot was developed in partnership with Center for New York City Neighborhoods (CNYCN), the New York City Mayor’s Office of Climate & Environmental Justice, and the Environmental Defense Fund (EDF).
The initiative is part of a multi-agency effort to enhance the financial resilience of low- and moderate-income (LMI) households exposed to flood risk in the New York City Region.
The parametric solution, insured by Swiss Re Corporate Solutions, will fund rapid cash payments by CNYCN following a flood event. The 12-month trial period commences in February 2023.
Earth observation data used to trigger payments
As the technology partner for the solution, ICEYE will supply hazard data based on satellite imagery and auxiliary information sources, which determine the overall flood extent as well as flood depth at an individual building level. This information is provided by ICEYE soon after the peak flooding is captured.
Swiss Re will use this data to establish whether the payment threshold of the pilot product has been met or exceeded. If triggered, CNYCN will receive an instant payment which will fund cash grants to those affected by the flood.
Additionally, the ICEYE data may be used by emergency management agencies throughout the city to improve targeted response activities.
The hope is that the resulting combination of more efficient response and quicker relief will lead to more successful recovery outcomes, ultimately driving financial resilience for these LMI households in the face of increasing flooding concerns.
“This historic program will bring critical financial support to low-income households and help the City respond decisively to flood events,” says Andy Read, Global head of Government Solutions at ICEYE. “This partnership represents a cornerstone step in the right direction as we seek to address a growing flood protection gap.”
“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,” said Carolyn Kousky, associate vice-president for Economics and Policy at EDF and the principal investigator on the National Science Foundation grant.
“Innovation takes collaboration, and ultimately, we achieve more when we work together.”