At Descartes, we model these storms in two ways:
Cat in a Circle
Index: one, two or three circles (of pre-determined distance) centered around the insured location(s) with a bespoke payout structure based on the client’s needs
Data provider: BOM
Coverage period: 1-year or client selected storm season
Wind at location
Index: Maximum sustained wind speed at insured location(s) with a bespoke payout structure based on the client’s needs
Data provider: Reask
Coverage period: 1 year or client selected storm season
Why choose a parametric cover?
Added transparency:
with pre-agreed thresholds & payout amounts
Bespoke policies:
with custom covers for one or multiple locations
Swift claims payout:
in a matter of days or weeks after a loss event
case study example
Cyclone risk for corporates
On April 8, 2023 a category 5 cyclone known as 'Cyclone Ilsa'' struck Western Australia, causing $4 million AUD in damages, with wind gusts up to 289 km/h.
Problem
The client experienced considerable damage to their commercial property that offers multiple facilities in the Pilbara region, with lost revenue due to extensive destruction and significant business interruption delays.
Solution
If covered at the time of the event, our cat-inthe-circle cover would have provided the client with a payout at 100% of the policy limit. The swift payout would have enabled the resort to quickly refurbish with instant liquidity, even covering revenue losses from guest cancellations and reduced tourist traffic.
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