An innovative product which gives financial flexibility in dealing with hardships in the immediate aftermath of an earthquake
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Earthquakes and other natural perils can have a long-lasting detrimental impact on organizations, creating serious financial losses resulting not only from physical damages but also from business interruption and various additional expenses. Due to the loss adjustment process involved, clients exposed to earthquakes often face gaps in coverage in their traditional insurance policies. In addition, the first 90 days following a disaster are the most critical in helping an organization recover. Securing the necessary financial resources for the wide variety of economic costs in the immediate aftermath is paramount to successful recovery.
It is for this reason Swiss Re Corporate Solutions developed QUAKE, a parametric, rapid-payout earthquake insurance product. Our proprietary QUAKE product is unique in the marketplace. We tailor each policy to closely mirror the insured’s likely experience during an earthquake by using USGS as the third-party data provider. Following an earthquake, USGS produces an event ShakeMap, allowing us to calculate ground shake intensity closest to the insured’s location(s). The policy pays out based on the intensity of the event as the insured experiences it.
What is parametric insurance?
Parametric insurance policies are products that pay out when an earthquake meets or exceeds a certain ground shake intensity at a defined location, and the insured incurs losses.
Why should your organization consider QUAKE?
• Payout: usually within 30 days following an event
• Transparent loss settlement: a payout is determined by physical parameters as provided by an independent third party
• Broad coverage: payouts can be used for property replacement, repair costs, business expenses, lost revenue, employee costs & assistance, or any other costs an insured faces in the wake of the disaster
• Proof of loss: simple confirmation of total loss amount, signed by an officer of the insured
Once terms are agreed and pricing is finalized, the policy is bound. If an earthquake occurs which impacts the insured’s location and the insured sustains a loss, they notify Swiss Re Corporate Solutions, we determine whether there is coverage based on third party data, and a payout is made.