The collaboration will propel the expansion of parametric cyclone insurance into new locations – bringing enhanced resilience, swift claims payment, and customized coverage to more corporate and public sector clients worldwide
It combines Descartes’ understanding and ability to incorporate new technology into parametric insurance product design with wind data from Reask, a leading windstorm risk analytics firm
Descartes Underwriting, the leading parametric-specialized provider of corporate insurance against Nat Cat and climate risks forms partnership with Reask, a tropical-cyclone risk analytics firm. The partnership aims to galvanize the availability and advancement of parametric cyclone insurance products by combining Descartes’ ability to incorporate state-of-the-art technology into its parametric product design, with Reask’s cutting-edge wind speed data.
Named wind storms pose a major threat to businesses, communities and public entities in coastal megacities, deltas, and islands. For example, in the last year alone, cyclone-driven economic loss is estimated to have reached $78 billion USD worldwide, with 68% of losses ($53 billion USD) not covered by insurance. Even in the more established North American market, Hurricane Ida, which carried an economic impact of an estimated $95 billion USD, illustrates the windstorm coverage gap, with only $30 billion USD or 32% of losses insured.
Kevin Dedieu, Co-founder & Head of R&D at Descartes Underwriting: “Data dearth in certain regions remains a gating factor to providing parametric insurance covers that enhance resilience. Reask leads the charge in its ability to quickly capture a windstorm event or provide wind at location maps in certain areas, such as the South Pacific, where data is less accessible,” stated Kevin Dedieu. In framing the impact of having reliable observations, he continued: “Precise, high quality data is a prerequisite to all parametric insurance structures. Wind-at-location data, such as that provided by Reask, amplifies customization and reduces basis risk in game changing ways that serve to benefit parametric insurance providers, brokers, reinsurers, and risk managers for public entities and private sector clients worldwide.”
Thomas Loridan, Co-founder and CEO at Reask: “Our Metryc solution enables the transfer of financial risk in all corners of the globe, expanding the reach of parametric insurance solutions such as those provided by Descartes Underwriting” stated Thomas Loridan. Regarding the strength of the Metryc product, he added: “It is thanks to our machine learning approach to wind modelling that Metryc can be used as a reliable third-party view of tropical cyclone wind speed data even in regions where observations are scarce.”