MS&AD backed Vortex launches instant parametric rain insurance

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Vortex Insurance Agency, a specialist parametric insurance and weather risk transfer agency backed by the MS&AD group’s Mitsui Sumitomo and a subsidiary of MSI GuaranteedWeather, LLC, has launched a new online portal through which businesses can buy parametric rainfall insurance instantly.

rain-drop-dampVortex is a front-end distributor of parametric weather insurance products for MSI GuaranteedWeather, which leverages reinsurance capacity from global player Hannover Re to support its underwritten product offering.

Based on a parametric rainfall index trigger, the RainIQTM portal provides instant access to rainfall insurance quotes based on parametric triggers, with premiums based on numerous factors to provide a highly sensitised and responsive insurance product.

Parametric rain insurance helps businesses cover loss of revenue, increased expenses and business interruption caused by rainfall events, both excessive rain or a lack of rain.

Premiums are calculated using a variety of risk factors, including the event location, time of day, time of year, and historical weather data.

Being parametric in nature, these insurance products have any claims determined with an event-based approach, meaning recoveries are dependent on rainfall measurements during an agreed upon hourly window, and not on whether a defined “loss” event occurs.

“With our new RainIQTM portal, customers can instantly see hourly rain insurance quotes for any location in the continental United States. Customers have previously expressed it’s too hard to find real answers to what rain insurance actually costs,” explained Andy Klaus, Lead Weather Index Insurance Producer at Vortex. “So, we made it more accessible.”

Vortex believes its parametric rainfall insurance product is more highly calibrated to protection buyers needs as it does not use local weather station data, instead leveraging the latest data advancements from the National Oceanic and Atmospheric Administration (NOAA) to construct localised-gridded data sets.

This means the parametric trigger input uses rainfall calculated within a 2.5 mile-square box that includes the actual insured location, rather than rainfall recorded at a station that could be much further away.

Vortex says this makes its rain insurance product more precise and accurate, important components of parametric insurance products.

The parametric rainfall product is targeted at events and festivals to begin, but Vortex expects to roll it out mnore broadly in future.

“We believe in making things easy to help keep your business moving. The quote process is quick and simple with our new RainIQTM portal,” Klaus explained. “We’ve also designed a simple pathway for an insured to purchase a particular quotation provided by the portal.”

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