AXA Climate, the parametric specialist risk transfer unit of global insurance and reinsurance company AXA, has launched Hail Protection, which reportedly is the first-ever parametric coverage designed to help businesses recover after hail storms.
AXA Climate, which was formerly called AXA Global Parametrics until a recent rebranding of the unit, developed the parametric hail insurance product in response to the increasing financial impact businesses are suffering from hail storms.
The company has launched a pilot program in Colorado, USA, where it said the demand for the new parametric product has exceeded its expectations.
Following an active 2018 U.S. hail season, when there were six notable storms that resulted in more than $1 billion USD in estimated damages, businesses in exposed areas have been seeing steep increases in their hail deductibles and premiums, AXA Climate said.
Among the businesses affected in this way, car dealerships have been especially hard hit with resulting inventory shortages, inability to discount cars, and claim payment delays, the company said.
The Hail Protection product has been designed through a strategic partnership between AXA Climate and specialist auto dealer insurance provider JBR Underwriters.
The parametric risk transfer product has been made possible thanks to a confidential proprietary technology that measures hail characteristics, the companies explained.
Once an auto dealership has the Hail Protection coverage in place, payouts are then calculated based on a parametric trigger using the maximum hail size measured during a storm.
This product offers advantages as it considers the auto dealership client’s actual experience on the ground, as well as being able to provide a quick and transparent payout after a hail storm, thanks to the parametric trigger.
As a result, AXA Climate and JBR Underwriters believe Hail Protection answers many pain points of traditional insurance, such as building and dealer inventory deductibles, balance sheet protection, and loss of car value.
JBR Underwriters works alongside independent insurance agents in order to distribute the Hail Protection solution direct to customers.
“I’m excited that we are bringing the innovative creativity of AXA Climate to address the challenges of weather risks for our auto dealership and property clients. JBR is a company that places a premium on simple and elegant insurance solutions for our customer and agent needs. This partnership with AXA Climate provides that solution,” Brian Gries, President of JBR Underwriters commented.
“We studied in depth the relationship between hail and resulting damages to create a solution that works for our clients,” added Antoine Denoix, CEO of AXA Climate. “Hail modeling has always been a difficult challenge for insurers. The precision data we use allows us to more accurately understand and control the risk from an insurance perspective.”
The firms have plans to expand Hail Protection’s car dealership program to other states of the U.S., as well as to develop the product to address hail related exposures in other industry sectors.
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