Over the past 50 years, 1,942 disasters have been attributed to tropical cyclones. This has tragically resulted in 779,324 deaths and led to nearly $1.5 trillion USD in economic losses. Taken on average, that’s 43 deaths and $78 million USD in damages due to cyclones every day. While the loss of human life has decreased significantly as a result of improved forecasts, the average cost of cyclone-driven damages has risen sharply. Industries most affected include: agriculture, construction, tourism and renewable energy.

At the global level, tropical cyclones have been the costliest natural disaster in terms of material damage and economic losses in the last two decades. For example, in 2020 alone, cyclone-driven economic loss was estimated to have reached $78 billion USD worldwide. Of these $78 billion USD in losses, 68% ($53 billion USD) were not covered by insurance. Even in the more established North American market, 2021’s Hurricane Ida, illustrates the windstorm coverage gap. Hurricane Ida carried an economic impact of an estimated $95 billion USD with only $30 billion USD or 32% of losses insured.

The rising sum of insured losses exacerbates the protection gap and underline the role of parametric cyclone cover in building resilience against corporate and public sector wind exposure.

The rising intensity of natural catastrophes across the globe is increasing pressure on corporate insurance program prices & capacities.

In response, more & more corporate and public sector clients are turning to parametric insurance to cover their Nat Cat exposure.

Learn why & see how one corporate client experienced Descartes’ parametric solutions in action with a join tornado and hail cover.

Hail and tornado are challenging perils that can cause extreme damage. Using our data driven approach and state-of-the art radar technology, we can better evaluate and analyze these exposures and damages in real time. This type of cover can be used for a variety of clients with exposures across industries in hail and tornado prone areas.

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As renewal season came to an end for 1/1/2021, many companies were left with insufficient capacity or placement shortfalls.

Whether you weren’t able to complete your clients’ full placement, were forced to compromise for lower Nat Cat limits than needed, or ended up with higher self-insured retention than desired, Descartes’ parametric solutions offer an alternative to complete the placement and fill the gap left on the Natural risks cover.

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When compared to other Nat Cat perils, Flood remains significantly under-insured in both emerging and mature markets. As public budgets contract and capacity continues to shrink in the world’s most flood exposed regions, many corporates are left unprotected. 

In this piece we take a look at flood exposure in the UK and discuss how parametric solutions can help fill the gap left by traditional capacity.