Swiss Re CorSo makes parametric payout to utility after typhoon Rai (Odette)

Share

Swiss Re Corporate Solutions, the large commercial risk specialist unit of the global reinsurance firm, settled a parametric insurance claim within days after a clients parametric trigger was breached by recent typhoon Rai (Odette) struck the Philippines.

swiss-re-corso-logoTyphoon Rai, known locally as typhoon Odette in the Philippines, reached super typhoon wind speeds as it approach the Philippines in December and caused significant damage and disruption, as well as loss of life, as it crossed the country.

One of the most severe typhoons to make landfall, Rai / Odette has already put the parametric World Bank catastrophe bond, the IBRD CAR 123-124, on watch and a calculation report is due soon.

But that wasn’t the only parametric risk transfer or insurance structure sitting in the path of the typhoon.

Swiss Re Corporate Solutions had sold a utility company in the Philippines a parametric insurance product and we’ve now learned that this was triggered and paid out rapidly after typhoon Rai (Odette) struck.

We understand that the parametric product was a simple cat-in-a-box type structure, so had a parametric trigger designed to payout based on typhoon related measurements, sustained wind speed in this case, exceeding a certain level while passing through a pre-defined geographic area, the box.

This type of parametric cover can be extremely useful to utilities and similar corporate protection buyers that have high-value assets in catastrophe zones, or accumulations of assets in certain regions where catastrophe or weather impacts could occur.

Martin Hotz, Head of Parametric Nat Cat at Swiss Re Corporate Solutions commented, “We live our claims commitment in the Philippines where within a few days of Typhoon Rai (Odette), we assisted one of our insureds via our innovative parametric solutions. We make our customers more resilient.”

The use of parametric triggers in insurance and reinsurance risk transfer continues to expand, with increasing numbers of large corporates integrating some parametric protection into their insurance arrangements.

The usefulness of parametric triggers becomes clearer with every improvement to the technology, new product offering and payout made, with news of payouts especially important to help educate risk managers and protection  buyers as to how parametric risk transfer could benefit them.

———————————————————————
Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.