Parametric natural catastrophe cover: Don’t let the weather ruin your business
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Parametric insurance solutions provide security that you won’t find with more conventional insurance products. The distinguishing feature of parametric insurance is that it depends on an external event, for example a hurricane or earthquake. If this insured event occurs, you receive compensation, which is graded according to the severity of the incident.
Parametric cover is an ideal way of protecting yourself against a catastrophe that could affect your business in any number of ways. It’s transparent and payments are made fairly promptly, normally within six weeks. That can make all the difference when you’re trying to ensure your business keeps running as normal.
Such considerations prompted a salt manufacturer located in a cyclone-prone area of Australia to come to us for protection against the threat of natural catastrophes. We collaborated with the company to define where their critical exposure lay and agreed on parametric natural catastrophe cover over a radius of 100 km around the site.
Having identified the key risks, we applied our underwriting expertise to define a parametric index matching adequate insured sums for the client’s needs with different levels of cyclone severity. As a result, we were able to ensure comprehensive protection for the company against those unforeseen weather-related risks that were missing from their off-the-shelf insurance cover.
Swiss Re Corporate Solutions has a strong track record in designing parametric products based on the client’s specific situation. Our technical and insurance experts know how to work with even the most complex risks and ensure the client is adequately covered in the event of a natural catastrophe.
As extreme weather events increase, companies will become more aware of their exposure to this type of risk and will start to review their insurance cover. When that happens, you should talk to us.