An insurance carrier exposed to named storms can obtain reinsurance that pays out based on predefined parameters

Our solution

Arbol developed a parametric reinsurance product covering hurricane risks in the State of Florida. This reinsurance solution delivered a payouts for Hurricane Ian, a major hurricane affecting the State of Florida just a few weeks after the storm made landfall. Most claims for this hurricane and others will spend months or even years being processed by insurers and reinsurers whereas this solution provided reinsurance support for the insurer in only a few weeks.

Payouts

The payout is calculated using a pre-defined notional portfolio of policies to determine parametric payouts for each policy location, aggregate them, and then apply a reinsurance structure. Location-level payouts are determined based on the distance of each location from a particular hurricane track and the maximum sustained wind speed captured along the hurricane track. The data is transparent as it comes from the National Hurricane Center, and the calculation mechanism is transparent as it is pre-agreed.