Parametric Extreme Temperature Insurance

As climate change intensifies, weather-sensitive industries, such as power utility, retailers, and agriculture all cope with extreme temperatures. Consequently, parametric insurance emerges with innovative solutions to protect the Sales and the net margins of these sectors.

Addressing the emerging risk of extreme temperatures

In an era where extreme heat and cold snap events are becoming increasingly frequent, businesses are facing unprecedented challenges. The year 2023 bore witness to a relentless series of heat waves that swept across the globe. Simultaneously, cold snaps have become alarmingly common, as evidenced by the catastrophic Great Texas Freeze of 2021 which resulted in the worst energy infrastructure failure in Texas state history. 

For many climate-influenced indstries, the extreme temperatures have a direct or indirect financial impact on their business success and net profit margin. Retailers sell less of their clothing lines in cold springs or mild falls, gas companies face a drop in demand in mild winters, and construction companies must halt progress in case of adverse weather.

Our parametric solutions provide a comprehensive financial hedge against such extreme weather-induced revenue losses and profit reductions. Through an intuitive, bespoke data-backed weather index, Descartes designs and provides an index cover specific to relevant industry and client needs.


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crop yield impacted by extreme cold
Step 1


We assess the client’s exposure to extreme temperatures and the associated financial implications, leveraging relevant weather and climate datasets.

Step 2


Design a customized cover, fit to the client’s unique needs, in which payout structures are indexed according to the number and/or intensity of extreme temperature days.

Step 3


Upon policy inception, we monitor the insured’s location on hourly temperature to determine if a qualifying event has occurred.

Step 4


Insured client receives a payout within days of the concluded coverage period, enabling swift allocation of parametric capital to cover revenue loss caused by extreme temperatures.

Our case studies are all over the world

Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.

  • North America Renewable Energy Extreme temperatures A New Generation of Cover Against Extreme Cold in Texas See the case study

Our parametric approach to addressing the emerging risk of extreme heat and cold events

For sophisticated risk programs that have identified vulnerability within their organization, including captives and large buyers, our team offers innovative, flexible covers through close collaboration with client and broker. 

Our proprietary models for extreme heat and cold leverage numerous data sources, from weather stations to high-resolution weather and climate data. which enables us to provide an unparalleled assessment of extreme weather risk. Utilizing the loss estimation provided by the client and our parametric model, we create a tailored parametric policy calibrated to each insured asset of the client with the ability to protect hundreds of locations against temperature extremes.

Our product unlocks coverage worldwide to protect the balance sheets of retailers, energy providers, construction firms, agribusiness, and the critical infrastructure sector, through a unique data-driven approach. 


extreme weather insurance

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