Arbol’s Parametric Solution Hands $10m Payout For Hurricane Ian Damages
Arbol’s Parametric Solution Hands $10m Payout For Hurricane Ian Damages
One of the first settlements for loss or damage attributable to Hurricane Ian has been made, according to Arbol, a platform for global climate risk solutions.
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Less than a month after Ian made landfall, Centauri Insurance, a property and liability insurer with operations in nine U.S. states, received the $10 million award.
For insurance companies vulnerable to named storms, Arbol created a completely collateralized reinsurance solution last year that pays out in accordance with predetermined, objective parameters.
Florida and other U.S. states are covered by the company’s parametric reinsurance program for storm risks. The payout is based on a reinsurance layer protecting the entire portfolio, and the parametric loss is calculated at the level of each policy location.
Sid Jha, Arbol Founder and CEO, said: “The parametric reinsurance product enables claims to be settled rapidly, months or sometimes even years faster than the rest of the industry.
Arbol’s Parametric Solution Hands $10m Payout For Hurricane Ian Damages
“Because these policies pay out on objective data triggers, we can bring much-needed efficiency and transparency to the insurance and reinsurance sectors while providing essential financial relief in the wake of a climate disaster like Hurricane Ian. Parametric solutions allow for claims to be settled rapidly and transparently, which is ideal for helping businesses in states like Florida with outsized risk exposure to hurricanes and enables long-term financial resilience.”
Location-level payouts, Arbol explains, 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 and calculation mechanism is transparent as it is pre-agreed before the contract commences, the firm noted.
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Arbol’s solution pays out using National Hurricane Center data provided by climate, the firm’s exclusive data partner, described as a leading decentralized climate information ecosystem.
Ricardo Espino, CEO of Centauri Insurance commented: “During recent years, back-to-back storm seasons have battle-tested insurers in our region and changed the landscape of our insurance industry.
“As insurers, we have to start thinking outside the box and seek innovative solutions for mitigating risk. Partnering with a cutting-edge company like Arbol, has given Centauri the ability to process claims faster in the aftermath of Hurricane Ian by utilizing real climate data and state-of-the-art technology.”
Arbol’s Parametric Solution Hands $10m Payout For Hurricane Ian Damages
Analysts estimate a re/insurance industry loss of as much as $57 billion. This estimate accounts for wind, storm surge and inland flood losses from Hurricane Ian’s landfalls in both Florida and South Carolina.
Arbol highlighted that processing claims and distributing payouts from homeowners, businesses, and other entities across Florida could take anywhere from a few months to years, as was the case with claims associated with Hurricane Irma.
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In the first half of this year, the Arbol platform transacted a $100 million in gross written premium (GWP), outpacing all GWP written in 2021. According to the firm, parametric programs in the agriculture and energy sectors – with ongoing expansion into the leisure/travel and climate risk sectors – are the ones leading the platform’s growth.
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