Blockchain technology and parametric insurance should be included in the Federal Emergency Management Agency’s toolbox as it strives to close the nation’s flood insurance coverage gap, according to a draft report by an advisory committee that makes recommendations to the agency’s director.
FEMA’s National Advisory Council said both high-tech solutions have potential to speed up claim payouts.
“Often, especially with large-scale disaster, even in situations where individuals are fully insured, the lengthy time to process a claim – often taking many months or years – means that the recovery and reconstruction process at the household level is delayed,” the draft report says. “This in turn leads to disaster displacement, which, when added to the low levels of protection against hazards, like floods, fires, windstorms, and others, yields abandoned properties and economic ruin.”
Parametric insurance is designed to release funds immediately when triggered by a predetermined risk threshold, such as flood levels or barometric pressure, the council said in the draft report. Blockchain can be used to create a land and property registry stored off site in a secure platform, the council said.
The council’s Federal Insurance and Mitigation Subcommittee recommended parametric insurance and blockchain during a meeting in October, online records show. Those innovations were among numerous measures recommended by the panel to address the coverage gap and increase resiliency.
The council collected recommendations from its several subcommittees and packaged them as a draft report during a meeting on Nov. 5-7. A spokesman for the agency said the council has 90 days from that date to produce a final report.
Lisa Miller, a lobbyist in Tallahassee, Fla. who advocates for increased private flood insurance coverage, said it is refreshing to see FEMA embracing technical solutions.
“This entire industry is moving from yellow legal pads to artificial…