The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
from Financial Regulatory Forum:
By Lawrence Hsieh, Practical Law for Thomson Reuters
(Thomson Reuters Regulatory Intelligence) - A homeowner's insurance policy covers most disasters, but it won't cover flood damage. Private insurers long ago deemed flood loss, which accounts for most disaster losses in the United States, as "too big to insure." So people who live in a flood zone and have a federally-backed mortgage must purchase flood insurance through the National Flood Insurance Program (NFIP), which was established in 1968 to make flood insurance more affordable.
The insurance industry is ripe for technological disruption, but the results may be dicey. Some areas of banking services, notably payments, have been relentlessly targeted by start-up companies since the financial crisis. But nine in 10 insurance executives polled by consultant PwC reckon at least part of their business is at risk over the next five years – a greater proportion than in any other area of finance.