Flood the market: Data-driven innovator disrupts an industry

What do you get when you cross a civil engineer with an insurance agent?

The answer could be Brad Hubbard, founder and CEO of National Flood Experts. The Tampa company specializes in saving residential and commercial property owners thousands of dollars on their insurance premiums by getting their property's flood-zone status adjusted or removed altogether.

Hubbard, 38, is a St. Petersburg native who worked in engineering “for about 12 or 13 years, until I grew to hate it,” he says. And the housing market crash in the late 2000s put the brakes on private development, leaving Hubbard with little but government work. “The pace of the work was slow, and I got bored," he adds. "I needed to do something different.”

That something different turned out to be insurance — an industry he believed was ripe for disruption.

“Some of my clients’ mortgage companies were saying they had to carry flood insurance,” says Hubbard, based on National Flood Insurance Program maps and regulations, “but I’m looking at their property as an engineer and saying, ‘This doesn’t make any sense.’”

So Hubbard made calls on behalf of his clients to the Federal Emergency Management Agency, which draws up NFIP flood zone maps for counties across the United States — but updates them infrequently due to high costs and lack of good data. FEMA told Hubbard it was possible to get a property changed to a less-pricey flood zone or removed altogether if he procured an evaluation from a professional engineer.

'I have a different perspective than anyone else in the industry. What we can do here, nobody else can do.' Brad Hubbard, National Flood Experts, Tampa

“I’m like, ‘Hmmm, I’m a professional engineer,’” he recalls. “Three days later, I had my first client out of a flood zone. They kept some flood insurance, just in case, but paid about half the price.”

That success, in 2012, gave birth to a new business. 

Four years later, National Flood Experts is on track to generate $1 million in revenue in 2018, Hubbard says, with a staff of 10 full-time employees. He expects to hire three to five more people in 2019, and projects higher growth, somewhere in the range of $1.5 to $2 million.

The bulk of National Flood Experts’ revenue — about 75% to 80%, Hubbard estimates — comes from flood zone removal services. But the company can also provide flood elevation certificates for $450 apiece. And thanks to his engineering skill set, Hubbard can design flood-venting and flood-proofing systems for homes and commercial properties.

“I think I’m the only professional engineer and licensed commercial insurance agent in the state of Florida,” he says. “I have a different perspective than anyone else in the industry. What we can do here, nobody else can do.”

With disruption comes resistance, however, Hubbard has learned. Some insurance agents, about 25% of them, Hubbard estimates, “really want to grow their book and see the value” in National Flood Experts’ services. “They have their clients’ best interests in mind," he adds. "Working with us differentiates them from every other insurance agent out there."

In other cases, “we’ve gotten pushback from insurance agents," Hubbard says, because his services, in essence, could take money out of their pockets. "But once we go through the process and file the federal documents," he adds, "there's really nothing for them to fight or dispute." 

Another major challenge is customer skepticism. “One of the hardest parts of our business is educating people,” says Hubbard. “We explain to them, ‘Here’s what we do; here’s why we do it; here’s how it can help you.’ And the response? ‘You can’t change that — whatever FEMA says is the law.’”

He adds, “A lot of times we’ll have to change the way our contracts are written because people just flat-out don’t believe it … It’s like [they think] I’m selling snake oil.”

The company’s clientele is split about 60-40 between commercial and residential properties, Hubbard says, and it is licensed to serve clients across Florida as well as in other states, including Alabama, Georgia and California. Clients who own property in inland areas can usually save the most money on flood insurance. That's because it’s easier to get total flood zone removal, as opposed to coastal areas where flood zones are much higher.

“With the coastal people, we’re usually able to find them cheaper insurance but there’s not a whole lot we can do as far as removal,” he says. “But once you start getting inland and you're dealing with lakes and rivers and creeks and all those different things, we have a very high success rate.”