Descartes’ parametric cover uses in-house algorithms to detect wind gust footprints and cover the damages in a single, straight forward policy, tailored to each tree type and value. Our product is suited for both forestry clients and industrials relying on wood production from pre-determined forests.
Client need: A large furniture manufacturer sources raw materials from specific forests in Northern Europe to build each of its products. A large scale windstorm spanning multiple of its supply forests could lead to delays in the production line, or extra costs due to having to buy wood from other providers.
Pain point: Traditional insurance covers aren’t able to adjust to the precise catchment area, and differentiate between tree types and value, leading to a severe mismatch between the potential payout and the financial risk faced by the client. In previous years, storm damage and repercussions on downstream production resulted in a 100M financial impact.
Our solution: A parametric solution that covers the exact geographical area of the supply forests, with a structure calibrated to the valuation and vulnerability of each tree type. The payout amount per wind speed is determined before policy inception, allowing the client to include it in its budget.
The Result: Following a triggering windstorm event, the client is quickly indemnified. This immediate access to cash is key to limit production line interruption and cover costs of sourcing alternative raw materials, allowing the client to meet delivery deadlines for critical accounts and seamlessly continue operations.