Nat Cat Insurance for T&D exposure against climate risk
Group 8
2023-04-26

Providing Nat Cat cover for overhead T&D lines, a complex exposure amidst climate and seismic uncertainty

Due to the frequency of overhead wire damage of T&D lines, corporates are left scrambling for cover as Nat Cat continues to evolve

Climate change continues to drive new extreme weather records, where 2023 saw an estimated $380 billion in economic losses. Significant events ranged from severe convective storms in the United States to  floods in Afghanistan, Australia, India, Thailand and Pakistan, drought in China, earthquakes to typhoons Megi and Nalgae in the Philippines. As some of the largest distribution networks in the world happen to fall into these Nat Cat-prone areas, many corporates and businesses suffer from extreme losses due to overhead wire damage of (T&D) lines. Consequently, following year-over-year losses, many traditional carriers are retreating from the market, leaving exposed corporates unprotected.

Parametric Insurance Solutions: Protecting T&D Networks

The Philippines is highly prone to natural catastrophes, including tropical cyclones (typhoons) and earthquakes. More typhoons are entering the Philippine Area of Responsibility (PAR) than anywhere else in the world, averaging 20 per year, with 8 or 9 crossing into the Philippines. An intense typhoon has the potential to cause not only damage to exposed assets but also severe business interruption losses, which are often vastly underinsured. Therefore, securing rapid financial liquidity is a priority in order to repair the damaged distribution network and return to normal operations. 

This is where parametric risk transfer solutions step in and offer access to new sources of capacity in the Philippines, and globally. Descartes’ bespoke and customizable covers provide an alternative solution to all industries dependent on T&D lines and deliver transparent terms and swift liquidity when corporates need them most.

Check out our case study to learn how parametric insurance can provide unparalleled protection for overhead T&D networks.

Due to the frequency of overhead wire damage of T&D lines, corporates are left scrambling for cover as Nat Cat continues to evolve

Climate change continues to drive new extreme weather records, where 2023 saw an estimated $380 billion in economic losses. Significant events ranged from severe convective storms in the United States to  floods in Afghanistan, Australia, India, Thailand and Pakistan, drought in China, earthquakes to typhoons Megi and Nalgae in the Philippines. As some of the largest distribution networks in the world happen to fall into these Nat Cat-prone areas, many corporates and businesses suffer from extreme losses due to overhead wire damage of (T&D) lines. Consequently, following year-over-year losses, many traditional carriers are retreating from the market, leaving exposed corporates unprotected.

Parametric Insurance Solutions: Protecting T&D Networks

The Philippines is highly prone to natural catastrophes, including tropical cyclones (typhoons) and earthquakes. More typhoons are entering the Philippine Area of Responsibility (PAR) than anywhere else in the world, averaging 20 per year, with 8 or 9 crossing into the Philippines. An intense typhoon has the potential to cause not only damage to exposed assets but also severe business interruption losses, which are often vastly underinsured. Therefore, securing rapid financial liquidity is a priority in order to repair the damaged distribution network and return to normal operations. 

This is where parametric risk transfer solutions step in and offer access to new sources of capacity in the Philippines, and globally. Descartes’ bespoke and customizable covers provide an alternative solution to all industries dependent on T&D lines and deliver transparent terms and swift liquidity when corporates need them most.

Check out our case study to learn how parametric insurance can provide unparalleled protection for overhead T&D networks.