Key Challenges for the Region
Moderate hurricanes disrupting access and tourism without causing physical damage
Revenue losses not covered by traditional insurance
Limited availability of standalone NDBI solutions in the market
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.
In hurricane-prone regions, even moderate storms can significantly disrupt hotel operations without damaging assets. Infrastructure closures and reduced accessibility can lead to substantial revenue losses, often uninsured under traditional policies.
Descartes’ Parametric NDBI Solution: Covering the Invisible Losses
Descartes’ parametric NDBI cover provides rapid payouts based on objective hurricane parameters, independent of physical damage. This ensures financial protection against revenue disruption caused by external factors such as access restrictions and reduced tourism.
Key Benefits
✔ Fill protection gaps: Complement traditional insurance not covering NDBI to enhance business resilience
✔ Transparent triggers: Pre-agreed payout structure with no claims adjustments needed
✔ Immediate liquidity: Payout validated within days, delivering capital at the maximum of financial stress
case study example
Parametric NDBI Solution for a Coastal Resort in Florida
In the US hospitality sector, moderate hurricanes (Cat 2+) frequently disrupt operations without causing direct physical damage to the insured asset. Events such as Hurricane Ian and Hurricane Irma demonstrated that infrastructure closures, evacuation orders and restricted access can materially impact hotel revenues even when buildings remain intact. Traditional property insurance typically requires physical damage to trigger business interruption coverage. As a result, revenue losses driven by access disruption or reduced area traction are often uninsured and standalone NDBI covers are very difficult to find in the traditional market.
Problem
In 2022, a coastal resort in Pine Island experienced no structural damage during a hurricane. However, bridge closures, airport shutdowns, and restricted access led to a sharp drop in occupancy over two weeks. The resort faced estimated revenue losses of $3–5 million, which were not covered by traditional insurance.
Solution
Descartes structured a parametric NDBI cover triggered by hurricane intensity and proximity. The solution accounted for exposure to access disruption and demand reduction, with a coverage limit of $10 million.
Result
If a Category 3 hurricane occurs within a defined radius, a payout of up to 50% of the $10 million limit can be triggered within days. This provides immediate liquidity to offset revenue losses, stabilize cash flow, and maintain operational continuity.
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.
