At Descartes, we model these storms in two ways, enabling us tobetter reflect the risk management approach of each client.
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: NHC, JTWC
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, HWind
Coverage period: 1-year or client selected storm season
Why choose a parametric cover?
Added transparency:
with pre-agreed thresholds & payout amounts
Bespoke policies:
with custom covers for one or multiple locations
Swift claims payout:
in a matter of days or weeks after a loss event
Without proper hurricane insurance, business and public entities are at risk from rising hurricane exposure
As the world is struck by an average of 84 named tropical cyclones every year, the need for hurricane insurance providing adequate coverage for corporates and public entities continues to grow. Hurricanes are thecostliest type of natural catastrophe in the US, where weather-related disasters have been estimated at around 363 billion dollars since 1980.
With destructive hurricanes causing enormous property loss in the US, especially since 2017, the insurance market has significantly hardened. The rising sum of insured losses around the world is putting increased pressure on traditional insurers – the prices have soared while the capacities have plunged and become limited. This hard market poses significant challenges for corporate and public sector clients, heightening their vulnerability in the wake of more frequent and increasingly intense hurricane events.
In order to address the limits of traditional insurance, Descartes Underwriting offers a new paradigm of parametric hurricane insurance. We build policies based on client-specific hurricane risk exposure and needs, respecting our clients’ budgets, and making swift pay-outs once the pre-agreed threshold is reached or exceeded regardless of the actual material damage. As a result, our parametric insurance solution can cover both property damage and non-damage business interruptions and help clients bounce back rapidly from hurricane events.
Descartes’ parametric insurance offers bespoke, transparent protection against hurricane risks
In cooperation with your insurance broker, Descartes Underwriting’s parametric hurricane insurance provides businesses and public entities with full protection against this growing risk. Leveraging near real-time data to monitor the track and wind speed of cyclones, our parametric insurance offers transparent and bespoke solutions to build resilience.
case study example
Hurricane risk for coastal assets
Learn how one corporate client used a hurricane parametric cover to protect their coastal assets in Florida and Alabama:
Problem
Policy period: 1 year
Annual aggregate limit: $75M
Maximum aggregate per circle: $15M
Data provider: NHC
Coverage: Cat-in-a-circle with one circle of 50 miles centered at all the insured’s locations
