Norwegian insurtech startup 7Analytics plans to bring its flood risk analysis technology to the U.S. market, according to Helge Jorgensen, co-founder and CEO.
With 4 million euro in funding led by Scale Capital in May, the startup, founded in 2020, is entering the U.S. following the severe flooding from hurricanes
7Analytics stresses a nature-based Norwegian insurtech startup 7Analytics plans to bring its flood risk analysis technology to the U.S. market, according to Helge Jorgensen, co-founder and CEO.
With 4 million euro in funding led by Scale Capital in May, the startup, founded in 2020, is entering the U.S. following the severe flooding from hurricanes
7Analytics stresses a nature-based approach to its modeling, Jorgensen said. "We start with building a strong foundation based on geo-scientific knowledge," he said. "It can be everything from geology, hydrology, geomorphology and so on. Everything that actually explains from the nature side why a building is prone to flooding."
The company's model uses land cover data, in high resolution, to evaluate whether the land is paved, grass-covered, forested or farmed, Jorgensen explained. "That impacts where the water will flow, and the speed and accumulation and saturation and all of these technical parameters," he said. "We tap into those in-depth as part of the technology."
Often, insurers' risk pricing models for floods are still relying on historical weather data that may be organized by ZIP code. In Jorgensen's view, this doesn't help predict the future flooding risk. The recent instances of severe flooding came from unpredictable weather patterns, he said. Models like 7Analytics has make it possible to price the risk much more accurately, improving insurers' profitability, according to Jorgensen.
Also, 7Analytics technology can account for more than 250 physical traits of buildings and around buildings – such as the use of the surrounding land and the building's distance from bodies of water. These are then fed into an advanced machine learning model, which is trained on a database of claims from insurers, according to Jorgensen. Data for the model is updated quarterly or semi-annually, and risk scores are updated accordingly.
Jorgensen believes that 7Analytics can help address the problem of insurers pulling out of coverage areas based on flood risks. Insurers leaving markets or dropping policyholders trickles down to banks not financing mortgages without insurance coverage. So providing banks with more accurate and granular risk data and modeling of buildings could find that some properties could be covered, as Jorgensen described it.
