Expanding parametric tropical cyclone insurance
Source: Middle East Insurance Review | Nov 2021
Swiss Re Corporate Solutions will collaborate with risk analytics firm Reask to expand the scope of its parametric windstorm solution STORM.
A press release by Swiss Re said the collaboration will leverage Reask’s advanced technological windspeed data to provide tropical cyclone coverage to corporate and public entities exposed to the peril.
Initially launched in hurricane-prone areas of the US and the Caribbean, STORM uses the highest reported wind speed at defined locations as a trigger. It is an insurance tool that pays out quickly and is often used to address traditional marketplace limitations or as a standalone risk transfer option.
Similar to other corporate solutions parametric products, STORM typically pays out within days and the customer is free to use the money for any financial loss associated with the event.
Reask uses its globally connected framework and machine learning to provide Nat CAT risk models for the insurance industry.
Reask’s tropical cyclone risk modelling product Metryc is built to address the specific requirements of Nat CAT parametric insurance contracts. In areas outside of the US and the Caribbean, STORM will use Metryc to determine whether a policy is triggered.
Swiss Re Corporate Solutions head of parametric Nat CAT Martin Hotz said, “Tropical cyclones continue to pose a major risk. Thanks to our collaboration with Reask, organizations around the world will have access to broader coverage, flexible use of funds and a speedier recovery with STORM.”
Reask CEO Thomas Lordian said, “Parametric solutions such as STORM help reduce the insurance protection gap. Until now, a lack of reliable observations in tropical cyclone-affected areas have limited the deployment of such solutions beyond established markets. Our Metryc product provides complete global coverage, augmenting scarcely available observations through predictive modelling.” M