Parametric River Level Volatility Insurance: Unparalleled protection for river-dependent industries and supply chains that drive our economy

Record low water levels of major European rivers, including the Rhine, are leaving many corporates grappling with supply chain disruptions & uncovered increased costs.

With historic low levels of precipitation, lack of snow, and a winter heat wave across Europe, 2023 is seeing rivers across the region continue to diminish to critically low levels, sending reminders of last year’s severe droughts. River level volatility impacts many industries globally, including: steel production, commodity trade, chemicals, agri-producers and power plants. With supply chains and many industries dependent on major rivers, contingent business interruptions arise with impacts ranging from disruptions in transport and local factory operations, to increased costs and heightened tension for important contractual agreements.  

For EU residents, Europe’s rivers and canals carry more than 1 tonne of cargo (per person) annually, contributing around €78 billion to the region’s economy. The 2022 European summer drought – the worst in 500 years – affected all the main rivers of Europe, particularly the Rhine, where the loading of barges was reduced by 75% in August. The Rhine represents Europe’s largest commercial river, with 300 million tonnes of goods transported each year. Thus, last summer’s drought impacts caused immense disruption, with far reaching effects across many sectors. 

As climate uncertainty continues to evolve, river level volatility will be compounded by shifting temperatures and precipitation patterns. Today, many corporates are left unprotected from most river-dependent activities, as the traditional market falls short for non-damage business interruptions to supply chains and industrial operations.  

Parametric risk transfer solutions offer access to new sources of capacity globally. These bespoke and customizable covers provide an alternative solution to all river-dependent industries, and deliver transparent terms and swift liquidity when corporates need them most. Descartes’ parametric products are client-customized and structured to directly meet their needs, budget, risk appetite, and asset location(s). With a parametric cover, corporates can even out their balance sheet and find capacity for non-damage losses that arise with changing river water levels.

Corporates & industries can no longer afford to remain unprotected from contingent business interruption that is outside of their control – parametric river level volatility insurance offers immediate relief.