The rising intensity of natural catastrophes across the globe is increasing pressure on corporate insurance program prices and capacities. More corporate and public sector clients are returning to parametric insurance to cover their Nat Cat exposures.
How can this be replicated for your client?
Descartes is proud to consistently collaborate with brokers and clients in the market for parametric solutions. We work diligently with our brokers to offer existing and prospective clients competitive and reliable solutions.
Festival cancellation due to extreme weather is on the rise
As climate change drives increased weather volatility and extreme weather events, the event management industry is feeling the heat.
The world’s oceans absorb roughly 90% of the warming caused by greenhouse gas emissions over the past 40 years. This added heat is driving storm severity, with stronger winds and potential for rapid intensification or increased rainfall. Major events can carry a large footprint, not only of losses but also in terms of business interruption from festivals needing to be canceled or postponed.
Take for example Hurricane Ian, which forced major event cancellation not only in the immediate vicinity of the storm path, but up and down the East Coast, stretching from Florida to Maryland. These sorts of business interruption losses are often left uncovered by traditional policies, thus they are uncounted in the estimated $63 billion in insured losses from the storm.
As exposures grow, festival organizers face price increases, and more restrictive terms & conditions from traditional insurance providers, whose losses from hurricanes and other Nat Cat are having dramatic impacts on the availability of traditional capacity. Parametric products, on the other hand, offer fresh capacity, flexibility, and transparency to meet the distinct needs of the festival industry.
Descartes’ parametric insurance provides financial protection against large the event cancellation.
case study example
A large music festival client in the Southeast was looking for event cancellation hurricane protection in a traditional market that had already been severely challenged by previous Nat Cat claims and the COVID-19 pandemic.
Problem
The client was looking for a bespoke policy period that aligned with the setup and duration of the festival.
They sought a structure with multiple payout options to account for a certain wind threshold, which would apply during the set-up and actual event.
Ultimately, they were seeking a substantial limit to cover their financial losses should a hurricane force them to cancel / shut down the concert.
Solution
Descartes was able to deliver a tailor-made policy solution to the client that met their unique policy term length, payout structures, and at the total desired limit to comprehensively protect their full economic interests.
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