Key Challenges for the Region
Extreme rainfall events are becoming increasingly frequent and severe across parts of the Middle East, creating substantial financial exposure for businesses with outdoor assets and operations.
Flooding can cause significant damage to high-value assets, including vehicle inventories, while also disrupting commercial activity and supply chains.
Traditional insurance policies often impose restrictive sub-limits on excess rainfall losses, leaving businesses underinsured and exposed to both property damage and non-damage business interruption costs.
Key benefits of parametric insurance
Transparent Terms
Policies are built on measurable triggers—like rainfall or temperature—so clients and their brokers know exactly when payouts occur. No fine print, no ambiguity.
Fast, Predictable Payouts
Once a triggering event occurs, payment is issued quickly and automatically—no need for on-site assessments or lengthy claims processes.
Customized Coverage
We work closely with brokers to build each policy around the client’s specific risk and budget profile, providing protection where traditional insurance often cannot.
Flexible Use of Funds
Payouts are based on the severity of natural events occurring, not solely on proven losses, giving clients immediate access to funds and empowering them to cover any type of financial loss, not just for physical damage.
Excess rainfall is emerging as a growing risk across the Middle East, where infrastructure and commercial assets are often not designed to withstand sudden, high-intensity precipitation events. For businesses with valuable outdoor inventories, a single day of extreme rainfall can result in severe financial losses that may not be fully addressed by conventional insurance policies.
Descartes' Parametric Excess Rainfall Insurance: Fast Liquidity When Heavy Rain Strikes
Descartes' parametric excess rainfall insurance uses objective weather data to monitor precipitation levels at the insured location and automatically triggers payouts when predefined rainfall thresholds are exceeded. With transparent triggers, pre-agreed payout structures, and no lengthy loss-adjustment process, businesses gain rapid access to liquidity when they need it most, helping them recover from both physical damage and operational disruption.
case study example
Parametric Excess Rainfall Solution for Car Dealership in Oman
After an extreme rainfall event caused severe flooding at a dealership site, more than 100 brand-new luxury vehicles were damaged, resulting in substantial financial losses.
Problem
The dealership experienced 7.13 inches of rainfall in a single day, causing its parking area to flood and damaging a large inventory of new luxury vehicles. While the business maintained traditional insurance coverage, high sub-limits applied to excess rainfall losses, leaving a significant portion of the financial impact uninsured. The event highlighted the need for a complementary risk transfer solution capable of providing meaningful financial protection against future extreme rainfall events.
Solution
By transferring part of its rainfall exposure into a parametric insurance policy, the dealership can secure tailored protection against extreme precipitation events. Using location-specific rainfall measurements, the policy automatically triggers payouts when predefined daily precipitation thresholds are exceeded. The structure can be customised to align with the client's risk profile and budget, providing transparent protection without the sub-limit restrictions commonly found in traditional insurance markets.
Result
If a similar rainfall event were to occur again, the dealership would receive a rapid payout based on the pre-agreed policy structure. Under the illustrated programme, the recorded rainfall would trigger a full payout of the policy limit, providing up to USD 50 million in immediate liquidity to cover vehicle damage, operational disruption, recovery expenses, and non-damage business interruption losses.
Contact Us
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