Parametric Insurance for Cyclone Protection in the Tourism Sector

Tropical cyclones expose businesses to property damage, non-damage BI, extra expenses, & long-term economic burden.

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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 theclient’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

area impacted by cyclone

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

Case study

On January 26, 2011 a category 5 cyclone known as 'Cyclone Yasi' ruptured through northern Queensland, Australia, causing significant damage with recorded wind speeds above 285 km/h.


The client experienced extensive damage to their resort, with revenue impcats not only from physical damage but also loss of attraction, forced shutdowns and employee relocation. All of which, took a massive hit on their balance sheet. The traditional market did not provide cover for non-damage business interruption expenses, and the client was required to take large cyclone specific deductibles.


If covered at the time of the event, our cat-in-the-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.

payout structure
cyclone path map

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