Client Need: A large pulp and paper company in the US carried significant wildfire exposure at their plantations and production facilities.
Pain Point: In a previous fire season the company suffered large losses in which their traditional policy counted and applied the deductible to each part of a fire as if it was an individual event. This significantly reduced the payout that the company received compared to losses incurred, a 25M USD difference.
Our Solution: A parametric wildfire cover, customized to the client’s precise and risk transfer needs, that closes the gap between expected and actual indemnity. Together with the client & their broker, we agreed on the amount they will receive if satellite-detected burned area exceeds a certain threshold at identified plantation locations.
The Result: At the end of the season, losses were computed transparently, with objective data and the client seamlessly received the expected payout as determined by the index.