Startup Neptune Offering Digital Private Flood Product to Agents, Carriers in Nationwide Expansion
A digital startup private flood insurance provider, Neptune Flood, has secured $2 million in seed round funding and has plans to “aggressively expand” nationwide by offering its platform to carriers, agencies and mortgage lenders.
Neptune’s Lloyd’s-backed residential product is currently available in Florida, Virginia and Texas, but will be opened up across more than a dozen U.S. states in early 2018. By summer 2018, Neptune plans to also deploy a direct to consumer platform.
Neptune utilizes advanced technology and predictive analytics to evaluate and price flood insurance. It promises a policy in less than three minutes, with no elevation certificates needed, and premium savings to homeowners up to 25 percent off what they would pay the National Flood Insurance Program (NFIP).
It says it offers “better pricing, higher limits, and coverage options not available through the NFIP” as well as same day coverage, with no waiting period as opposed to the 30-day wait that the NFIP requires.
“It’s easy, cost effective and secure,” said Jim Albert, co-founder and chief executive officer.
Neptune Flood’s policies are currently backed by Lloyd’s of London. Neptune launched its insurance product in early 2017 in Florida, and has now achieved Lloyd’s Coverholder status with authority to provide flood insurance throughout the U.S.
Chief Operating Officer Stephanie Lee is spearheading distribution. “We have a multi-channel approach to distribution, including strategic partnerships with MGAs and carriers,” she told Insurance Journal.
Lee said several of its strategic partners plan to also work with mortgage lenders and realtors.
She said Neptune has been hearing from insurance agents “who are tired of the slow and paper laden NFIP process.”
However not all agencies will be considered.
“[W]e are recruiting agencies that have evolved from the traditional model and are able to embrace the operational efficiency of a full service digital ecosystem,” Lee said, adding that Neptune is fully integrated with QuoteRush, a top homeowners comparative rater in Texas and Florida.
She said the API integration allows partners to adopt Neptune’s program directly into their rating platforms, quoting in sub-second response time.
Neptune is currently writing in Florida, Texas and Virginia and will be launching in new states in four-week sprints, starting with January 29t in California, New Jersey, North Carolina and Alabama. She shared the subsequent planned roll-out:
- February: Georgia, South Carolina, Maryland and Pennsylvania
- March: Ohio, Illinois, New York and Massachusetts
- April: Hawaii, Mississippi, Connecticut and Arizona
- May: Tennessee, Washington, Michigan and Delaware
“If our partners have other states in their forecast, we can quickly consider and deploy for them,” she said.
Among the agencies already offering Neptune Flood are Prosper Insurance, a Virginia Beach digital agency; Rocket MGA, a digital managing general agency in Florida; QuickInsured, a national technology enabled insurance agency headquartered in Ohio; and Matic Insurance, a digital home insurance agency based in California that integrates with lenders.
Neptune Flood was founded in 2016 by Jim Albert and Bill Martin. Prior to starting Neptune, Albert was president of JDA Advisors, a Florida technology and data analytics firm. Prior to that, he was chief information officer for Bankers Insurance in Florida.
Co-founder Martin is CEO of Bunker Hill Insurance Group, a unit of Boston-based Plymouth Rock Assurance. In 2015, Martin founded consulting firm Tangibly Unique Strategies, which was later folded into Neptune. Martin now sits on the Neptune board. Prior to joining Bunker Hill in 2016, Martin was president of Bankers Insurance in Florida.
Lee, COO for Neptune, has experience in the Florida insurance market. She was president, COO and chief marketing officer for Prepared Insurance from 2009-2016 before joining Neptune. She has also been a recruiter of insurance executives with CE Insurance Services and marketing manager for Sunshine State Insurance, a Florida domestic insurer.
The $2 million investment was led by Trevor Burgess, chairman of Florida real estate development firm TRB Development and the founder and former CEO of C1 Bank (Florida bank sold to Bank of Ozarks in 2016), with participation from existing investors and Albert, Neptune’s founder and chief executive officer.
Burgess and Jonathan Carlon, president of TRB Development, will join Neptune Flood’s board of directors.
Private interest in the flood insurance market has been slowly building. The market could be as big as $40 billion, according to Verisk.
Verisk, through its ISO subsidiary, has launched a new personal lines flood insurance program that enables insurers to offer flood coverage that is “broader and more flexible” than that available through the NFIP, and offer options in a template similar to the familiar standard homeowners policy. ISO began the state-by-state filing process for its new personal lines flood program in December 2017 and said this process will continue throughout 2018.
“The floods of recent years have highlighted the inadequacy or complete lack of coverage for many Americans, including those who didn’t think they were at risk for flooding,” said Neil Spector, president of ISO.
In October, Bermuda-based reinsurer Hiscox Re, along with insurance linked securities investors (ILS), launched a private label flood insurance product for personal lines insurers to sell in the U.S. The turnkey flood insurance product is named FloodXtra.
Florida and a few other Southeast states have had some success creating a private flood insurance market. Florida’s private flood entries include TypTap, a flood insurance company formed by Florida-based Homeowners Choice Insurance (HCI) in 2016. TypTap recently expanded beyond Florida and into Arkansas, California, Maryland, North Carolina, New Jersey, Ohio, Pennsylvania, South Carolina and Texas.
TypTap is counting on its website technology. Potential customers enter their address and answer three quick questions, then choose an agent from a dropdown menu to purchase the policy. “The technology is the big thing,” said Kevin Mitchell, HCI vice president for investor relations. “It really hit a chord with agents.”
Another new entrant to the Florida flood market, American Integrity Insurance Co., began selling coverage in June.
Widespread availability of private flood insurance may have to wait for Congress to pass NFIP reforms designed to encourage more private insurers to enter the market. The House has passed such reforms but they remain stalled in the Senate.
The NFIP itself is caught up in the lack of a federal government budget and is currently set to expire on Feb.8 unless Congress passes another continuing resolution or a budget.