New parametric and index-based weather risk transfer options tailored for the real estate and hospitality sectors have been launched by units of Sompo International Holdings Ltd., the Bermuda headquartered specialty insurance and reinsurance provider.
The development sees the corporate Risk Solutions unit at Sompo International and the firms Global Weather risk transfer specialists coming together to create a new product tailored for a specific industry that is particularly exposed to weather variability and extremes.
The parametric weather risk transfer products can be customised for every client’s individual risk exposures, offering tailored insurance coverage for loss of revenue caused by any variations in weather variables.
The weather coverage can be structured as a standalone insurance solution, or implemented as part of an existing program in order to help clients buy-down their deductibles.
For corporate insurance buyers, the use of parametric coverage can help them to significantly reduce or even eliminate the deductible if a catastrophe event such as a hurricane occurs. The same product can also provide coverage for elements of loss such as hotel cancellations, or other business interruption costs, while the parametric triggers based on weather indices mean payouts are less ambiguous and can be much faster than traditional indemnity insurance coverage.
These weather risk transfer contracts can be indexed to a range of site-specific weather variables, including temperature, rainfall, snowfall, and hurricanes, using data measured and reported by global meteorological agencies.
Sompo International will be offering protection for both single locations and property portfolios as well, and the coverage duration can range from several days to several years.
Michael Chang, Chief Executive Officer of Sompo Global Risk Solutions, commented on the news, “This was a great opportunity for us to marry our deep expertise in the real estate and hospitality industries with the breadth of specialty coverages that Sompo International offers. By partnering with our Global Weather team, we are able to offer our clients unique and cutting-edge products to provide financial security in light of increasingly frequent and severe weather events.”
Martin Malinow, President of Sompo Global Weather, added, “Working with our Sompo Global Risk Solutions colleagues, we have developed new products tailored to the specific circumstances that keep property owners awake at night. Weather variations and catastrophic events can have a significant impact on profitability in these sectors and by customizing our weather risk management solutions we are able to directly address their unique needs.”
The flexible coverage offered by these products should appeal to corporate insurance buyers looking for responsive protection that can help them reduce their costs after weather disasters and minimise business interruption caused.
For insurance and reinsurance firm Sompo International it’s a great example of bringing together two specialist units to create a suite of products that meet a client need.
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