A new form of resilience against hail for critically exposed industries
Hailstorms are a dangerous and costly phenomenon, with catastrophic impacts for high value crops, greenhouses, solar panels, and outdoor vehicle storage.
Influenced by a changing climate, record damage from hail events have been registered over the past decade in Australia, North America and Europe.
The hail risk landscape is changing. It is anticipated that climate change will both increase the likelihood of hailstorms in some regions and enable the formation of larger hailstones – as illustrated by the recent record breaking storms in Queensland, Australia in November 2020.
As hail risk evolves, traditional modelling and insurance products fall short, leaving many corporate clients unprotected. At Descartes, we have developed a new generation of combined satellite and radar-based hail modelling, to provide brokers and corporates bespoke, first-in-class parametric coverage anywhere in the world
Our parametric hail product is based on our proprietary satellite and radar-based models, which leverage the latest AI technique to assess hail risk at any point of the globe.
In full collaboration with the broker & client, we design a customized cover that is structured to payout based on predefined stone sizes and number of hailstone impacts per m². The structure is calibrated to each insured asset and we monitor hail exposure using a combination of radar data and on-site sensors to provide a real-time hail detection, capturing stone size and storm intensity with high granularity.
Our revolutionary product unlocks coverage for hail-vulnerable assets all around the world – from greenhouses to high value crops, vineyards to solar panels, outdoor vehicle storage and more.
Client Need: A Recreational Vehicle (RV) dealer in the United States faced surging hail insurance prices. The hike in their premium was partially due to the inherent vulnerability of RVs’ roof structures. Hail claims made by others in recent years was also drove the spike, since traditional rates are based on recent claims in the region rather than based on the underlying risk at specific location
Pain Point: While the RV dealer had an estimated $10M in exposure, traditional markets were only willing to provide coverage up to $200K, charging a high premium for an unsatisfactory limit. With hail season approaching and a full lot of expensive inventory on the line, protecting their investment was paramount to the client.
Our Solution: A parametric hail solution that utilized our proprietary hail model to precisely assess the hail exposure of the client’s lots and defined a payout structure tailored to the relative hail-resistance of RV roof material. Together with their broker, we defined the hail size and storm intensity (impacts per m²) thresholds and corresponding payout amounts to meet the budget and risk appetite of the client.
The Result: The client received their desired coverage up to the full exposure limit at an affordable price, while benefiting from a tailored payout structure that matched the expected repair costs of their vehicles. With real-time monitoring and no on-site loss adjustment required, the client had certainty of receiving their expected indemnity within days of a hailstorm triggering their policy.