Hail — Descartes
Group 8

Parametric Insurance Case Study: Hail Risk

Client Need: A Recreational Vehicle (RV) dealer in the United States faced surging hail insurance prices. The hike in their premium was partially due to the inherent vulnerability of RVs’ roof structures. Hail claims made by others in recent years was also drove the spike, since traditional rates are based on recent claims in the region rather than based on the underlying risk at specific location.

Pain Point: While the RV dealer had an estimated $10M in exposure, traditional markets were only willing to provide coverage up to $200K, charging a high premium for an unsatisfactory limit. With hail season approaching and a full lot of expensive inventory on the line, protecting their investment was paramount to the client.

Our Solution: A parametric hail solution that utilized our proprietary hail model to precisely assess the hail exposure of the client’s lots and defined a payout structure tailored to the relative hail-resistance of RV roof material. Together with their broker, we defined the hail size and storm intensity (impacts per m²) thresholds and corresponding payout amounts to meet the budget and risk appetite of the client. 

The Result: The client received their desired coverage up to the full exposure limit at an affordable price, while benefiting from a tailored payout structure that matched the expected repair costs of their vehicles. With real-time monitoring and no on-site loss adjustment required, the client had certainty of receiving their expected indemnity within days of a hailstorm triggering their policy.