Key Challenges for the Region
High Exposure to Severe Cyclones: Northern Australia regularly experiences intense tropical cyclones, causing heavy structural damage and operational disruption for hospitality assets.
Limited Access to Traditional Coverage: Insurers often restrict cyclone coverage for high-risk Australian properties due to underwriting criteria, risk mitigation requirements, and limited appetite.
Rising Climate Pressures: Increasing frequency and severity of weather events heighten underinsurance risks for hospitality businesses.
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.
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.
Fast, Predictable Payouts
Once a triggering event occurs, payment is issued quickly and automatically—no need for on-site assessments or lengthy claims processes.
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.
Cyclones remain one of the most damaging natural perils for Australian hospitality businesses, with traditional insurance often proving insufficient for rapid recovery after major storms.
Descartes’ Parametric Cyclone Insurance: Track- and Category-Based Protection
Descartes’ Cat-in-a-Circle cyclone product offers swift payouts and transparent, bespoke coverage based on cyclone category and track proximity.
case study example
Parametric Cyclone Solution for Hospitality Businesses in Queensland
In 2017, a hotel in Queensland experienced severe losses after Tropical Cyclone Debbie.
Problem
Among the affected properties, a hotel in Queensland suffered major losses following Tropical Cyclone Debbie. Due to high-capacity requirements, they did not have adequate insurance to quickly recover. Claims settlement took several months, delaying operations and leaving the client uncertain about the indemnity.
Solution
To address these gaps, the client implemented a Cat-in-a-Circle parametric cyclone cover to supplement their traditional property insurance. This tailor-made solution provides full transparency and ensures rapid payouts in case of a future event.
Result
In the case of a future cyclone hitting within the trigger parameters, the client would receive A$15M, corresponding to 30% of the A$50M insured limit, providing the liquidity needed to remain resilient and operational throughout the event.
Contact Us
Whether you're quoting a complex risk, looking to break into new markets, or just curious about parametric insurance, our team is here to help you win. Reach out and we will get back to you within 48 hours.
