Key Challenges for the Region
Widespread monsoon-driven flooding causing submergence of agricultural land, particularly rice paddies
Temporary cessation of farming activities leading to severe operational and financial disruption
Limited capacity and inadequate coverage offered by traditional insurance for excess precipitation events
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.
Excessive monsoon rainfall in southern Malaysia frequently leads to river overflows and flooding, damaging crops and halting agricultural operations. These events pose a significant threat to food security and farmers’ financial resilience.
Descartes’ Parametric Excess Rain Insurance: Rapid Protection Against Flood-Driven Losses
Descartes’ parametric excess rain insurance provides fast, transparent financial protection against extreme precipitation events. Using verified third-party rainfall data, the solution triggers payouts based on pre-agreed rainfall thresholds, eliminating the need for on-site loss assessments and enabling swift recovery.
case study example
Parametric Excess Rain Solution for Agriculture in Malaysia
In January 2023, a Malaysian agribusiness operating a paddy plantation in Segamat, Johor, faced severe exposure to excess rainfall.
Problem
Persistent monsoon rains caused widespread flooding across southern Malaysia, submerging extensive agricultural lands. On January 24th, the client’s plantation received 185mm of rain within 24 hours, leading nearby rivers to overflow and resulting in substantial damage to rice paddies. With limited coverage available in the traditional insurance market, the financial losses from such events remained largely uninsured.
Solution
To address this gap, the client opted for Descartes’ parametric excess rain solution, securing access to fresh capacity and protection against future extreme precipitation events. The policy was structured around daily cumulative rainfall thresholds, ensuring clarity and transparency in payout calculations.
Result
If a similar event were to occur and daily cumulative rainfall at the client’s location exceeded 160mm, the client would receive a full payout based on a $10 million limit, enabling rapid recovery, replanting, and resumption of farming activities.
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