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
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.
Problem
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.
Solution
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.
Interested in a solution ?
