Meet Adam Rimmer, Co-Founder of Flood Flash

FloodFlash are an InsurTech company challenging the traditional parameters of insurance, by providing fast, flexible and affordable flood cover to the people that need it most.  

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Traditionally, flood insurance has not been the ‘sexiest’ product out there, but according to FinTech Global, the InsurTech industry has grown massively in the last three years.  Startups in this space are helping the insurance market tackle some of the biggest challenges it has ever faced, including digital transformation, and how to deliver great customer care post Covid-19. Almost $17bn has been invested in InsurTech companies since the beginning of 2017, according to figures published by specialist research firm.

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And FloodFlash are no strangers to innovation. FinTech has recently added them to their InsurTech100 list of the world’s most innovative insurance solutions, putting them amongst some of the most exciting companies in the global fintech movement - which is quite the accolade.

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We sat down (via Zoom) with Co-founder, Adam Rimmer, to learn more about parametric insurance, the challenges of start-up life, and why celebrating their biggest milestones (floods) is somewhat bittersweet.

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Tell us a little about Flood Flash - who you are and what you do?

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FloodFlash is an insurance company which offers flood cover based on parametric data. We install a sensor at the insured property which measures flood depth. When flood water hits a level that the client chooses we send them a pre-agreed payout.  It removes the uncertainty, cost and time from insurance payouts, meaning we can offer fairly priced, instant-settlement cover.  

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We developed a bespoke algorithm to set tailored prices. We use this to write personalised and competitive flood policies for the highest-risk locations around the world.

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How did the business come about? What motivated you to start it?

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The idea for FloodFlash came from existing ‘parametric insurance’ for very large re-insurance contracts.  For example, after Hurricane Sandy (2012) flooded the New York subway, the Metropolitan Transport Authority struggled to get cover.  The way around it was to issue ‘catastrophe bonds’. These bonds pay out if water levels rose above 8.5 feet in the New York harbour.

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This type of insurance means less uncertainty for underwriters, but the administration and legal fees required made it too expensive for anybody other than large corporations. This is where our idea took seed.

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80% of catastrophe damage is currently uninsured. This represented a huge opportunity for us to offer a solution for businesses, not just those with the biggest budgets.  Previously these types of low-frequency but high severity events were very hard (and expensive) to insure, but with increased computing power, more affordable tech, and some smart thinking we were confident that we could be the first to make event-based cover available to anybody who needed it.

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What is your purpose or mission, that drives everything you do?

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‘No business should fail because of a catastrophe’

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In the UK this is particularly pertinent because so many businesses are vulnerable in the face of a catastrophe - if one hits, they will fail.  We want to make sure those businesses have the cover they need to survive.

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And Parametric insurance really is about SURVIVAL. The agreed payout may not always cover the total cost of damage in the end, but it gives businesses cash when they need it, so that they can carry on trading. It’s a lot like life insurance in that respect – you agree roughly what you need beforehand and work from there.

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Previously flood insurance has typically been included with property insurance products.  However as COVID has seen the insurance market ‘harden’ and premiums rise, flood insurance is one of the first things to be removed - leaving many businesses very vulnerable.

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How did you meet your co-founder? Do you have different strengths and weaknesses?

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Ian and both studied at Cambridge University so had some mutual friends, but we really connected whilst we were on the RMS graduate scheme.  (RMS is the world’s largest catastrophe data modelling organisation)

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Ian had the initial idea, which he shared with me.  We used to commute home together on the Northern Line and talk about its potential in the early days. Gradually as the business began to take shape in our heads, we would increasingly sneak away from the old job to meet people and ask questions.  Through speaking to a chain of connections we eventually met Rob Lumley, an insurance entrepreneur who made the pre-seed investment in FloodFlash via the Insurtech Gateway.  After the pilot we were able to raise a seed round (with LocalGlobe and Pentech).  That was in the Summer of 2018, and allowed us to grow the team, develop the sensor and software, and officially launch in February 2019.

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Ian is definitely the brains behind the idea, and I have the more entrepreneurial bent - which makes us a great partnership.

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What have been the highlights of starting and running the business so far?

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The thing with parametric insurance is that there is never a steady trickle of claims. You have to wait for a catastrophe to hit and then comes the big bang.

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That big bang came for us on the 9th February 2020 when Storm Ciara hit the UK.  Weirdly, it was the most exciting moment for FloodFlash - and the biggest validation of the product. The storm hit on Sunday, and by Monday we had paid all claims, in full.  This was previously unheard of, and completely astonishing.  We moved the dial on property claims from months to hours.  Businesses and livelihoods survived because of our insurance.  

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Over the course of Storm Ciara and subsequently Storm Dennis, we paid out between £800,000-900,000.

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This was a really important milestone for us.  Previously we had been selling through brokers on theory alone.  We had no case studies to speak of.  The testimonials we received following Ciara were amazing - one business owner swearing on this daughter’s life that taking our policy was the best thing he’d done in five years!

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COVID doesn’t seem like it would impact the flood insurance business - have there been any impacts or changes (good or bad) to come from the pandemic?

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Flood risk is still there, even during a pandemic.  In fact, people’s changing mindset around risk and uncertainty has been accelerating the push to parametric insurance.  Things have been good, and we have been growing fast since May.

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We have suffered the same operation struggles that many other businesses have - especially around maintaining a productive and happy workforce.  We have always been very flexible about letting people work from home, so we weren’t particularly worried about that, but it is hard to replicate a culture remotely.  We have done all of the common things, like Zoom socials, especially when there is something to celebrate.  Last week everybody received a bottle of champagne when we hit a huge milestone. I think it’s important to still remember and celebrate the small wins - even when you’re not together.

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In between lockdowns we scheduled pub-meets with subsets of the team which was good.

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Every member of team has an equity stake in FloodFlash - which means we are all invested in a very real way. This helps unite us in a common goal - we genuinely all want the business to succeed, which creates a strong culture, even when we are apart.

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Advice to young start-ups?

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Advice is important - but for every piece of advice I have received I have almost always received a contradictory piece!  So yeah, ask some people you trust for advice - but ultimately you have to trust yourself.  I believe that ultimately you should trust your gut.  

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The other thing is that you can’t wait for certainty all the time.  There will never be the perfect time.  Ask yourself at what point there is diminishing returns on knowing everything?

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And finally, build a team you can trust - it makes everything else you contend with much easier.

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What books or blogs are on your recommended reading list at the moment?

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At the moment I am enjoying Matthew Syed’s ‘Black Box Thinking’.  

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‘The Triumph of the City’ by Edward Glaeser is also great for anybody interested in urbanisation and cities - it challenged and changed the way I think about land use more than anything else I’ve read.

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What do you love most about x+why?

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Due to COVID-19 we haven’t really had a chance to enjoy the office as much as we would like.  However, we are really excited about being based in Hugeunot Place - the beautiful courtyard will be a blessing in the summer months. Hopefully it will give us a chance to meet some of the other tech businesses based there.

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