Specialty insurance and reinsurance group Chaucer, owned by leading Chinese reinsurer China Re, has partnered with parametric and data-driven insurtech MGA Yokahu to deliver parametric Caribbean hurricane insurance to at-risk communities in the region.
Chaucer has launched an affordable microinsurance product for those who live in the Caribbean, aiming to provide cover against impacts of hurricanes and other climate change-related events.
By partnering with insurtech Yokahu, the parametric insurance product has been designed with accessibility in mind and customers can buy protection simply through an app and payouts will be made automatically when pre-defined hurricane conditions occur.
Yokahu, which is providing the trigger technology for the parametric insurance, will monitor the wind speed at a customers location and the atmospheric pressure at the centre of a hurricane.
If these reach pre-agreed limits, a payout will be issued to the policyholder within a maximum of 10 days following the hurricane, although often this can be within 24 hours the partners explained.
They see central pressure is a more accurate and reliable measurement than maximum wind speed and believe that it more closely correlates with the economic impact of an event.
Ed Lines, Active Underwriter of Syndicate 1084 at Chaucer commented on the product launch, “The Caribbean is one of the most underinsured regions in the world and climate change is only making the problem worse. The reality is that traditional insurance products are simply not an option for many in the region.
“This product will help to close the insurance gap, giving people greater peace of mind.
Tim McCosh, CEO and founder of Yokahu added, “We’re delighted to be working with Chaucer to help protect at-risk island communities and help address the protection gap.
“The average cost of hurricane insurance is inaccessible to most people, with traditional hurricane insurance products requiring people to pay premiums against the value of their homes.
“Our parametric approach means that a claims payout is determined by the severity of the event at hand – and therefore can be triggered automatically. We have arranged these funds to be transferred to the claimant’s mobile phone, so they have easy access to funds when it matters most.
“I’d like to thank the team at Chaucer for their support in bringing this offering to market and I am looking forward to continuing to work with them towards improving the resilience of some of the areas of the world most affected by Climate Change.”
As we also explained recently, Yokahu signed an agreement with McKenzie Intelligence Services (MIS), a geospatial information, insurance and reinsurance intelligence provider, which will be the sole trigger data provider for Yokahu’s parametric insurance products.