Corporate Flood Insurance – A Proven Solution in Australia

Interms of tangible & intangible losses,floodis Australia’s costliestnatural-hazardrelateddisaster.

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The frequency & severity of flood events in the Brisbane River basin & surrounding area have led to:

severe capacity restrictions and the exit of many commercial insurers from the market;

increasing in numbers of self-insuring clients due to the withdrawal of capacity for flood;

claims assessments and payments being delayed due to disputes regarding the definitions & exclusions in the wording (e.g. property contents, inventory, etc.)

Brisbane River

Key benefits

Our parametric covers offer an alternative solution


Fresh capacity:

Parametric products offer an alternative to un-insured risks.


Customised protection:

Flexibility and straight-forward structure tailored to clients needs



Certainty of capacity and pricing year on year


Timely claims payment:

Internet of Things (IOT) - On-site monitoring, public gauges, BOM & satellite imagery permit for real-time claims assessment & quick payout following a triggered event. Allowing clients, the flexibility to allocate funds towards repair costs that help their business return to their usual operations quickly.

With 3 consecutive years of La Niña, Australian corporates are left with an unaffordable flood threat in the traditional insurance market.

In terms of tangible & intangible losses, flood is Australia’s costliest natural-hazard related disaster. Since the beginning of this year, Australia’s exposure to flash and riverine flooding has been relentless. As the Bureau of Metrology (BOM) declares a third consecutive year of La Niña, the region is unable to absorb additional rainfall due to full dams and saturated soil, meanwhile traditional insurance capacity has all but dried up.

Challenges in traditional flood products and loss determination

As a result, the spike in premiums (a 26.4 % increase in some cases, despite not making claims) is not the only shortfall in traditional flood products. Following the February and March 2022 floods in Queensland & New South Wales, there was a shortage of loss adjusters & specialist hydrologists needed to determine if the resulting damage was from fluvial or pluvial floods. 

This had major implications on the sub-limits and deductibles of insureds’ traditional property policies. Fluvial flood cover was subject to a separate sub-limit and deductible, where the pluvial was not. This resulted in a 6 month delay in hydrologist review before a claim determination could be made. 

Descartes’ parametric flood Insurance: swift indemnification and tailored solution

Descartes’ parametric flood insurance does not have these complications as both types of floods would have been covered under the parametric insurance policy. Therefore claims settlement would be much quicker, with no questions about what was and wasn’t covered.

As flood exposures and losses are projected to increase – surpassing AU $8.8 billion in insured losses since 2019 – corporate clients can’t afford to remain uninsured. Descartes’ Parametric cover provides customized protection, with a flexible and straight-forward structure tailored to clients needs, risk appetite and budget.

case study example

Flood risk for manufacturer

Manufacturer located along the Brisbane River suffered losses during 2015 and 2022 floods


Hard market conditions and past losses left them with significant rate hikes so they opted to fully self-insure in recent years.


With awareness of their on-going exposure, the client and their broker transferred their flood risk to a parametric policy custom-tailored to their needs & budget.


If repeated, the 2022 floods would have again hit their site and surpassed the pre-defined policy thresholds. In which case, they would receive a rapid insurance payout to cover repair costs and bridge the business interruption impacts on their balance sheet.

payout structure
The client would receive $5M AUD
satellite image of flood in Australia

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