Accelerating the Private Flood Insurance Market Leader: Our Investment in Neptune
As climate change continues to shape our world, the increased risk of flood-related damage has become a significant concern for homeowners and businesses alike. Traditional insurance models have historically struggled to underwrite this risk effectively, which led to coverage being provided almost exclusively by the federal government through the National Flood Insurance Program (NFIP). Despite the rising frequency and severity of floods, the NFIP often falls short due to its limited coverage and outdated user experience. Since the introduction of the Biggert-Waters Flood Act in 2012, the private flood insurance market has emerged as a compelling alternative to the NFIP.
The private flood insurance market remains in its early stages, but is growing rapidly. According to Zion Market Research, the global private flood insurance market is expected to grow at a compound annual growth rate of 23.5% from 2020 to 2026. This growth is driven by a significant increase in flood-related property damage, a desire for more expansive and customizable coverage options and continued policy adoption across the country (only ~13% of U.S. households have flood insurance today).
As growth investors focused on the financial services ecosystem, we at FTV have been closely tracking the rapid growth of this sector for many years. As we studied the space, it became clear that Neptune Flood Insurance had established itself as the leader in the private market by virtue of its expansive distribution network, unique technology platform and blue-chip capacity relationships.
Neptune offers a fully digital, intuitive quote-to-bind experience to over 11,000 brokers in 48 states and Washington, D.C., which drastically simplifies and shortens the binding process to under two minutes. Neptune is able to do this through use of its proprietary AI platform, Triton, which instantly assesses flood risk on a property-by-property basis, allowing Neptune to provide an accurate assessment of risk, personalized pricing for customers and competitive premiums. Neptune also leverages a unique radial disaggregation model that distributes risk broadly across multiple states and flood zones, leading to lower volatility loss ratios for its reinsurance capacity partners. Based in St. Petersburg, Florida, Neptune now provides flood insurance policies to over 150,000 American homeowners, renters and businesses.
We could not be more excited to announce our growth equity investment in Neptune Flood. We have known CEO and President Trevor Burgess for several years and have immense respect for him and his exceptional team. As a growing, profitable, bootstrapped company in one of our core sectors, Neptune is a perfect fit for FTV’s investment mandate. Given our significant domain expertise and deep industry relationships through our Global Partner Network®, FTV is uniquely suited to support Neptune in continuing on its impressive growth trajectory. We are also excited to partner with our friends at Bregal Sagemount as we all work to further expand Neptune’s leadership position in the private flood insurance market.
Congratulations and welcome to the FTV family, Neptune and team!
- Think Forward
- Why We Invested