Parametric and Climate Risk Insurance
Parametric Insurance policies are new, innovative risk management solutions which allow for risks to be transferred or financed in non-traditional ways. These insurance solutions may offer alternatives to funding losses that are not possible with traditional insurance products.
The concept of Parametric Insurance is that instead of traditionally indemnifying for the actual loss incurred, this policy covers the probability of a predefined event happening (e.g., a major hurricane or earthquake), and pays out according to a predefined scheme. Events may refer to an index-based trigger (e.g., a specific level of rainfall) or an event within a defined area.
As the environmental impact from climate change worsens, so does the volatility associated with weather and climate risk. The World Economic Forum placed 2020 as the joint warmest year on record with 2016. Current science predicts global temperatures will increase between around 1.5 and 3 degrees by 2050, and up to 6 degrees by 2100. That is not a world we, or anyone, can safely adapt to. Due to these changes, now more than ever, there is a need for new and innovative risk management solutions which look to address the protection gaps within traditional insurance policies. As the world begins to evolve, so do our policies and risk transfer solutions.
Our Parametric Solution: FloodFlash
If your Insurers don’t provide flood cover, or impose big excesses on your policy, you might need FloodFlash. This simple parametric insurance policy pays claims typically within 7 days of a flood and claims are based on levels of rainfall, not damage caused, meaning you choose the pay-out that suits your property.
FloodFlash is a fast, straightforward and flexible type of cover which protects your business whilst keeping you in control.
Learn more about FloodFlash
Insuring Climate Risk in 2021
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