Arbol's first transaction with Centauri Insurance was completed in June 2022. Recognizing the potential financial risks associated with hurricane events, Centauri proactively partnered with Arbol to implement a parametric reinsurance solution tailored to cover hurricane risks in Florida. This strategic collaboration proved invaluable after Hurricane Ian struck. The $10 million payout that Centauri received allowed them to efficiently manage their own financial exposure and quickly access funds to support their operations.
The structure of the parametric coverage was meticulously designed through extensive modeling work, ensuring that the payout accurately reflected the actual losses incurred. By leveraging objective data triggers and a streamlined payout mechanism, Centauri Insurance demonstrated their commitment to protecting their policyholders against financial losses.
Hurricane Ian, one of the most powerful storms ever recorded in the U.S., made landfall in early fall 2022, resulting in a surge of insurance claims. The scale of the event led to approximately $60 billion in insured losses and $100 billion in overall losses. Traditional claims processing methods were time-consuming, posing significant challenges for insurers like Centauri Insurance.
Payouts were calculated based on individual policy location data, taking into account the distance and sustained wind speed along the hurricane track, and were aggregated and applied to a reinsurance structure.
The data and calculation mechanism were pre-agreed upon, ensuring transparency and accuracy in determining the payout.
The carefully designed structure ensured that the payout accurately reflected the actual loss incurred by Centauri. This allowed Centauri to effectively manage their financial risk exposure and maintain operational continuity, bolstering their customer satisfaction and reaffirming their commitment to leveraging real climate data and advanced technology.
Centauri Insurance received a $10 million payout within just three weeks after Hurricane Ian, providing crucial financial support during a time of need. Building upon this success, Arbol continued to support Centauri with additional parametric protection for the 2023 hurricane season, further enhancing their resilience against future events.
This collaboration showcased Centauri's commitment to innovation, risk mitigation, and providing financial resilience for their policyholders in the long term. By deploying Arbol's solution, Centauri adeptly managed its own risk, ensuring they could continue to support the recovery and rebuilding efforts of policyholders affected by Hurricane Ian.
