North America to continue leading the commercial flood insurance market
North America to continue leading the commercial flood insurance market | Insurance Business America
Catastrophe & Flood
North America to continue leading the commercial flood insurance market
Report notes that the industry’s valuation is set to reach new highs in the next decade
Catastrophe & Flood
By
Kenneth Araullo
Allied Market Research released a report indicating that the commercial flood insurance market, valued at $8 billion in 2023, is projected to reach $30 billion by 2033, with a compound annual growth rate (CAGR) of 14.1% from 2024 to 2033.
The report identifies several factors contributing to market growth. The expanding number of insurance markets is a key driver, though high premium costs and a lack of awareness about flood risks are hindering some growth.
Additionally, the report noted that increasing urbanization and infrastructure development in developing countries, along with technological advancements in flood hazard prediction, present opportunities for market expansion.
In the coverage type segment, building coverage accounted for more than two-fifths of the global commercial flood insurance market revenue in 2023, holding the highest market share.
The demand for building coverage is fueled by unpredictable weather patterns and the rising frequency of extreme weather events, such as hurricanes and heavy rains, leading businesses to seek comprehensive coverage to protect their operations.
The policy provider segment saw the National Flood Insurance Program (NFIP) leading with nearly three-fifths of the global market share in 2023. Allied Market Research explained that the NFIP’s subsidized rates, which can be more affordable than private insurance options, make it an attractive choice for many businesses.
Its availability and standardized pricing structure contribute significantly to its market presence, with economic factors such as property values and business continuity concerns further driving demand for flood insurance through the NFIP.
In the distribution channel segment, direct sales dominated, accounting for more than three-fifths of global commercial flood insurance market revenue in 2023. The growth in this segment is supported by the rise of digital sales platforms and Insurtech solutions, which simplify the insurance purchasing process for businesses.
Additionally, government programs that subsidize flood insurance premiums or offer incentives are expected to further boost the direct sales segment’s growth.
Regionally, North America held the largest share of the commercial flood insurance market in 2023, contributing nearly two-fifths of the global revenue. The increasing frequency of floods due to climate change and the significant presence of commercial flood insurance providers in the region are expected to drive market growth.
Public-private partnerships are also fostering the development of more comprehensive flood insurance products, which are anticipated to support further market expansion.
The report also noted the key players in the commercial flood insurance market, including Assurant, Inc, Chubb Group, FloodFlash Limited, Hylant Group, Inc, Insurance America LLC, JMG Insurance Corp, Main Street America Insurance, Nationwide Mutual Insurance Company, Sutcliffe Insurance Brokers Limited, and The Hartford.
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