Parametric typhoon insurance delivering rapid, predefined payouts without loss adjustment
High Exposure of Infrastructure: Overhead transmission and distribution (T&D) lines across the Philippines are highly vulnerable to typhoons, leading to widespread damage during severe storms.
Insurance Market Constraints: Limited capacity in the traditional indemnity market and significant premium rate hikes make it difficult to secure adequate coverage.
Operational Disruption: Typhoon-related power interruptions impact economic activity, disrupt supply chains, and generate substantial additional costs due to repairs and project delays.
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.
Typhoons are among the most destructive natural hazards in Southeast Asia, bringing extreme winds that can severely damage critical infrastructure and cause prolonged service outages.
Descartes’ Parametric Typhoon Insurance: Fast, Transparent Protection When It Matters Most
Descartes’ Cat-in-a-Circle parametric typhoon insurance provides straightforward, customized protection triggered by predefined wind speed and storm track parameters. Using real-time, third-party data, the solution enables rapid payouts without the need for complex loss adjustment. This approach offers clients financial certainty and liquidity following a severe typhoon event.
case study example
Parametric Typhoon Solution for the Utilities Sector in the Philippines
Overhead T&D networks have extensive exposure to typhoon risk, which a large telecom company based in the Philippines experienced first-hand when they were hit by Typhoon Odette (Rai) in December 2021.
Problem
They faced steep premium rate hikes and prolonged delays in claims payment resulting from complications in the traditional loss adjustment process due to the dispersed distribution of their assets.
Solution
To avoid a similar situation in the future, Descartes worked with the client and their broker to tailor a parametric solution aligned with the company’s needs and budget. The client’s typhoon exposure was assessed, and coverage was designed to encompass their entire network of T&D lines across the Visayas region, with payouts structured according to wind speed thresholds.
Result
With real-time monitoring, if a typhoon surpassing the predefined threshold were to occur, the policy would trigger a swift payout of $5 million, eliminating the need for loss adjustment across widespread assets.
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.
