Addressing Flood Risk in North America
Flooding is the most frequent and one of the most economically damaging natural hazards in the United States. Climate projections highlight a growing threat: overall pluvial flood risk in the U.S. could increase by approximately 12% under a medium-emissions scenario and up to 19% under a high-emissions scenario by mid-century. Recent events underscore this trend. In early April 2025, severe flash flooding across the Mississippi Valley caused extensive damage in Kentucky, Tennessee, and Arkansas. In July, flooding in Texas’s Hill Country resulted in more than $1 billion in damage, while a separate event inundated over 3,100 buildings in Milwaukee weeks later. Additional flooding affected Ruidoso, New Mexico; parts of the Southwest due to tropical cyclone remnants in October; and western Washington in December following multiple atmospheric rivers.
For businesses, the impact of flooding extends far beyond direct property damage. Operational disruptions can persist for weeks or months, affecting inventory, logistics networks, site accessibility, and workforce continuity. These secondary effects often generate substantial additional costs, compounding insured and uninsured losses. As flood claims rise and risk becomes more concentrated in vulnerable regions, insurers are responding with tighter sub-limits, higher deductibles, and more restrictive coverage terms—widening the protection gap for organizations operating in flood-prone areas where capacity is increasingly constrained.
Accurately estimating flood risk remains complex, shaped by evolving climate patterns, land-use changes, and localized exposure characteristics. Descartes supports brokers and their clients with advanced, location-specific modeling and data-driven risk assessment, enabling a clearer understanding of unique flood exposures and more effective, tailored risk transfer solutions.
Our Parametric Approach to Flood Risk
Descartes offers two parametric flood solutions: Flood-at-Location and River Gauge. Our parametric products offer coverage against direct and indirect losses, utilizing a combination of historical flood data and advanced risk modeling capabilities.
Flood-at-Location:
- Utilizes on-site sensors installed by third-party experts to precisely assess and measure flood risk in real-time
River Gauge:
- Utilizes a preselected river gauge to monitor the water level index
Our cost-effective approach ensures clients receive precise, customized flood protection tailored to their specific needs.
Parametric Coverage In 4 Steps
Assess
We assess and evaluate the client’s flood exposure, leveraging river and rainfall data as well as third-party sensor data.
Customize
Design a customized cover, fit to the client’s unique needs, in which payout structures are indexed according to the water level.
Monitor
Upon policy inception, we monitor the insured's location for flooding to determine whether a qualifying flood has occurred.
Payout
Insured client receives a payout within days of reporting a loss, accelerating financial recovery and return to normal operations.
Our case studies are all over the world
Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.
Who Should Consider This?
Descartes’ flood products are uniquely designed to address key industries exposed to risk, such as:
- Retail
- Manufacturing
- Hospitality
- Real estate
- Infrastructure
- Construction
Our products also cater to both domestic and international exposures across the globe and can be easily integrated into a client’s insurance program or captive.
Capacity
Up to $80 million per contract
Benefits Powered by Parametric Flood Insurance
Our parametric flood covers exemplify the effectiveness of parametric insurance solutions.
- Prompt Compensation: A swift, transparent process that clients can rely on, excluding the need for a lengthy indemnity claims process.
- Data-Driven Approach: The observation of historical losses and risk modeling allows us to accurately address client’s needs.
- Bespoke Policies: Coverage tailored to the client’s needs and budget.
Empowering Businesses and Brokers with Advanced Flood Insurance Solutions
Descartes partners with insurance brokers and their clients to transform flood risk protection through parametric insurance. Our exclusive flood products, competitive commission structures, and dedicated support make it easy for brokers to offer straightforward and customized parametric solutions, addressing one of the most damaging and increasingly frequent climate perils.
Our parametric flood coverage can complement existing property programs, accelerating recovery after major flood events with fast, transparent payouts triggered by objective data.
Our Expertise Includes
- Bridging and filling coverage gaps left by traditional flood insurance
- Supporting clients with high-risk exposures or limited access to conventional flood protection
By Partnering With Descartes, You Can
- Secure critical capacity in a tightening flood insurance market
- Differentiate your proposals and strengthen your position in competitive RFPs
- Access new markets and attract valuable clients exposed to flood risks
- Eliminate complex policy language and exclusions with a clear, transparent parametric policy structure
- Co-create tailored solutions that reinforce your portfolio and build long-term relationships with clients and carriers
FAQ
Flood-at-Location: How is the payout structure determined?
We analyze historical flood events by using a combination of different data sources and compare them to the client's past events, loss history, if any, and site information (flood counter-measures, topography, infrastructures, etc.). The payout structure is designed to closely match the flood depth with the client’s expected losses. If no loss history is available, we estimate projected losses based on discussions with the broker and client or with expert judgment and proxies from similar cases.
Flood-at-Location: What is the index based on?
The index is based on the maximum flood depth above the ground as measured in feet by the installed sensors at the client’s location.
Flood-at-Location: What types of damages are covered under a flood parametric policy?
A parametric policy covers any economic loss sustained from a flood event, including but not limited to property damage, business interruption, and extra expenses. There does not have to be direct physical damage to trigger a payout.
Flood-at-Location: What are the advantages of using on-site sensors?
On-site sensors provide an accurate reading of the flood depth at the insured location. This helps to reduce basis risk by providing a local, reliable mechanism to trigger flood payouts.
Flood-at-Location: How does the claims process work?
1) The client notifies their broker, Descartes and/or risk carrier of the loss.
2) After the event, we collect the final data from the thirdparty certification agent, who assesses if the intensity of the event has triggered the policy and at what payout level.
3) Using the collected data, we then create an event report stating the maximum monetary amount to be recovered based on the payout structure defined in the client’s policy.
4) After receipt of the event report, the client issues a Declaration of Loss Statement to Descartes and/or the risk carrier.
5) After receipt of the Declaration of Loss Statement, the client receives the payout in agreement with the policy terms, allowing them to accelerate continuity of operations.
Flood-at-Location: How reliable are the on-site sensors used by Descartes?
No-contact sensors, particularly radar-based sensors, are reliable, robust, and are capable of handling adverse conditions with a wide range of water quality. They rely on high-frequency waves to accurately measure the flood depth, which allows them to remain virtually unaffected by temperature, turbulence, and other obstacles.
River Gauge: How are the index & payout structure determined?
We analyze historical events by using the reported water levels at the recommended reference station and correlate the data with any prior losses the insured may have incurred. If there have not been any prior losses, we estimate projected losses during collaborative discussions with the broker and client to determine the strike and exit points of the payout structure.
River Gauge: What is the index based on?
The index is based on the maximum daily water height as measured in metres at the reference station (preselected water gauge). The water level is equal to the maximum water elevation relative to the tidal datum. The tidal datum is the base elevation used as the reference point from which to establish water heights or depths.
River Gauge: What types of damages are covered under a flood parametric policy?
A parametric policy covers any economic loss sustained from a triggering event, including but not limited to property damage, business interruption, and extra expenses. There does not have to be direct physical damage to trigger coverage.
River Gauge: How does the claims process work?
1) The client notifies their broker, Descartes and/or risk carrier of the loss.
2) After the event, we collect the final data from the certification agent, ensuring the most accurate level of information to assess if the intensity of the event has triggered the policy and to what payout threshold.
3) Using the collected data, we then create an event report stating the maximum monetary amount to be recovered based on the structure outlined in the client’s policy.
4) After receipt of the event report, the client will issue a Declaration of Loss Statement to Descartes and/or the risk carrier.
5) As defined within the policy, after receipt of the Declaration of Loss Statement, the client will receive the payout in agreement with the policy terms, allowing them to accelerate continuity of operations.
River Gauge: How is the data source determined?
In most cases we rely on publicly available data published by sources such as the Australian Bureau of Meteorology (BOM), National Oceanic and Atmospheric Administration (NOAA), and the United States Geological Survey (USGS). In Australia, we source most river gauge data from BOM or state government sources, when needed. Following a triggering flood event, we commission an independent third-party agent that will certify the data and water level index to determine if the client is entitled to a payout.
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