Group 8

Parametric Insurance Case Study: Corporate Flood Risk

Client Need: A hospitality client in Europe with high value outdoor assets faces capacity restrictions in the market due to its river-front location in a flood-prone area. 

Pain Point: While the client had invested heavily in protecting its assets from flood – installing flood protection barriers and using flood resistant building materials in a recent renovation – traditional insurers were failing to provide the business with a flood cover due to the region’s flood rating

Our Solution: A parametric flood cover that uses proprietary models to assess the client’s specific flood risk and is structured to pay out when water levels surpass a predefined threshold on site, measured in real-time by a connected sensor. The thresholds are set to reflect the clients’ view of the risk and their ongoing investments in flood prevention. 

The Result: The client was able to transfer its flood risk to a tailored flood protection, filling the gap left in traditional market capacity. Descartes then monitors their exposure in real-time through a combination of public river gauge data and IoT devices installed on-site, notifying the client and providing indemnification within days if the policy triggers.

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