Climate and catastrophe risk across Australia and New Zealand is changing faster than traditional insurance capacity and pricing can keep up. In 2025, Descartes helped clients in forestry, real estate, agriculture, transportation, entertainment, and hospitality close critical protection gaps with parametric solutions designed for speed, clarity, and meaningful capacity.
Below are six success stories showing how parametric insurance can complement or replace traditional cover when exclusions, high deductibles, or lack of capacity become blockers.
1. Wildfire (Burnt Area) for Forestry in New Zealand
Industry: Forestry
Peril: Wildfire / bushfire
Location: New Zealand
Limit: USD 5M
The challenge
The client was experiencing costly conditions as well as high rates for their traditional forestry cover due to a lack of capacity offering.
The parametric solution
By applying our burnt area bushfire solution, we were able to price below the traditional offering whilst also saving the client the additional cost of the conditional coverages they had to take out on their previous coverage.
2. Earthquake Capacity for Real Estate in Wellington, New Zealand
Industry: Real estate
Peril: Earthquake
Location: Wellington, New Zealand
Limit: NZD 50M
The challenge
Located in Wellington, New Zealand, a highly exposed region to earthquake risk, a client faced limited capacity options from the traditional market at reasonable pricing levels with large event deductibles.
The parametric solution
We created a parametric cover that addressed their budget request as well as providing meaningful capacity to cover their Wellington assets. In the scenario of a covered event, the client would be able to access funds swiftly.
3. Drought Protection for Crops in New South Wales, Australia
Industry: Agriculture, crop
Peril: Drought (rainfall deficit)
Location: New South Wales, Australia
Limit: AUD 1M
The challenge
A client faced drought risk that threatened crop yield during the growing season. The crop type included wheat, barley, canola, and chickpeas.
The parametric solution
We built a parametric offering that indexed rainfall at the farm's location. Low cumulative rainfall over the risk period would have triggered payouts of up to 100% of the insured limit.
4. Rainfall and Flash Flooding Cover for Transportation in Queensland, Australia
Industry: Transportation
Peril: Rainfall / flash flooding
Location: Queensland, Australia
Limit: AUD 500K
The challenge
A client experienced flood exclusions on their traditional program. Being near a local river, this was a major concern.
The parametric solution
We used multiple grid points along the river and around the client's location to obtain a blend of impact from rainfall at the location itself as well as rainfall flowing downstream and impacting the client. The higher the average rainfall across these grid points, the larger the payout once the strike was triggered. This approach gave the client confidence in their coverage and reassurance that they were supported, even though their site is in a high-risk area.
5. Wildfire-in-a-Circle for Entertainment Sites in Queensland, Australia
Industry: Entertainment
Peril: Wildfire / bushfire (area-based)
Location: Queensland, Australia
Limit: AUD 3M (aggregate)
The challenge
As this client’s sites were based within national parks, the traditional insurance market was not open to including bushfire cover, leaving a major gap in the client’s insurance program.
The parametric solution
Descartes, in conjunction with the client and broker, designed a shapefile which captured the client’s spread assets at the sites, ensuring all assets were covered for bushfire within the design radius. The client then opted for an aggregate limit of AUD 3,000,000—giving them the flexibility to allocate the funds per event.
6. Tropical Cyclone Cat-in-a-Circle for Hospitality in Northern WA, Australia
Industry: Hospitality
Peril: Tropical cyclone
Location: Northern Western Australia
Limit: AUD 2M
The challenge
The client was well-versed in parametric cyclone insurance as they had been a prior purchaser. With the insight of Descartes’ Business Development team, we were able to re-design an appropriate structure to meet the client’s risk exposure and budget.
The parametric solution
A cat-in-a-circle structure with two radius limits was applied, addressing physical damage and business interruption exposures for this site which is highly prone to significant cyclone risk.
What these 2025 success stories have in common
Across Australia and New Zealand, these programs succeeded because they focused on four outcomes clients actually need:
- Capacity when the market is constrained (or unwilling to offer cover)
- Transparent triggers tied to measurable event parameters
- Faster liquidity than traditional claims settlement
- Structures tailored to real exposure, including grid points, radius designs, and shapefiles
Want to explore a similar solution?
If your program faces exclusions, large deductibles, or pricing pressure for wildfire, earthquake, cyclone, flood, or drought risk, parametric insurance may help close the gap.
Talk to our team about parametric protection in Australia and New Zealand: https://descartesunderwriting.com/contact
FAQ
What is parametric insurance?
Parametric insurance pays a pre-agreed amount when an objective trigger is met, such as rainfall level, wind intensity, or earthquake parameters, rather than paying based on assessed loss.
How is parametric insurance used in Australia and New Zealand?
It is commonly used to address protection gaps for perils like bushfire, tropical cyclone, flood, drought, and earthquake, especially where traditional markets apply exclusions, high deductibles, or limited capacity.
Can parametric insurance cover business interruption?
Yes. Structures can be designed to provide liquidity aligned to business interruption needs, depending on the trigger and the coverage design.
How fast are payouts?
Payout speed depends on the structure and data source, but parametric covers are designed to pay quickly after the trigger is confirmed, helping clients access funds when they need them most.
