Addressing the market – a nuanced approach to household insurance in areas of flood risk.

But how many of these are above the ground floor? Working with building outline and height data would give highly accurate results, but even without that data to hand, we can make a number of baseline assumptions to get an indicative answer.

First of all, we can look at mixed-use buildings. These are buildings which contain both residential and commercial addresses. Addresses such as farms, home offices and B&B’s are ruled out as they do not contain multiple residential addresses. However, flats and apartments above shops are included, as long as there are two or more residential addresses in the building. There are 1,270 buildings like this in the Flood Zone, containing 10,874 residential address points (RAPs). If we assume that 90% of these are above the ground floor then that gives 9,787 potentially underserved addresses from this type of building alone.

We can also make some assumptions about the 5,355 buildings containing almost 36,000 Residential Address Points (RAPs) that are purely residential. One assumption is that the higher the number of addresses in a building the lower the proportion of those addresses which are on the ground floor. This won’t be universally true of course, there are some large apartment complexes with hundreds of units that are only 2 or 3 storey, but broadly speaking this will be true. If we assume that buildings with 2-4 RAPs have 50% of these above the ground floor, and gradually increase the proportion of above-ground RAPs up to 80% for buildings with over 50 RAPs, that gives us 21,668 addresses in residential buildings that may be unserved at present.

Adding the multi-use and residential only building types gives us a total potential market of 31,454 RAPs, which is a significant market opportunity.

In areas with widespread LiDAR data availability, building footprints and heights can be extracted to give a more accurate figure. Keep an eye out for an upcoming blog post on that.