Protecting Corporates with Parametric Insurance Against Cyclone

Cyclones expose businesses to property damage, non-damage BI, extra expenses, and 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 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

Area impacted by cyclone

Why choose a parametric cover?

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Added transparency:

with pre-agreed thresholds & payout amounts

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Bespoke policies:

with custom covers for one or multiple locations

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Swift claims payout:

in a matter of days or weeks after a loss event

case study example

Cyclone risk for banana plantations

Learn how one corporate client used a cyclone parametric to protect their banana plantations between Cairns and Townsville:

Problem

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

Solution

Pain Point: The client experienced considerable damage to their banana plantation in Mission Beach, with lost revenue due to lost harvest and significant business interruption delays

Result

Solution: If covered at the time of the event, our catin-the-circle cover would have provided the client with 100% of the policy limit. The swift payout would have also enabled the plantation to purchase the necessary sucker volume to quickly replant to return to business as fast as possible.

payout structure
The client would receive 10 million AUD
cyclone track

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