Tropical cyclones are one of the costliest natural catastrophes causing multi-peril impacts from damaging winds to floodings. Planning ahead to ensure predictable and timely access to much-needed liquidity is key for the organisations and governments to mitigate the long-term financial impacts.

AXA Climate parametric solutions are structured using “Cat in a circle” and “Cat in a polygon” concepts allowing for different locations and a larger area to be covered. We use multiple indices for the contract structure: cyclone’s path and strength. It allows to complement traditional insurance on tropical cyclones by proposing Deductible buydown structures, Business Interruption solutions with or without direct impact by such event. For each basin, we use data provided by the Regional Specialised Meteorological Centers insuring rapidity to settle claims, simplicity and transparency.

How does it work?

1

Client chooses radius to create one or more circles around the insured location.

2

If a cyclone tracks through the circle…

3

a payout is triggered depending on the predetermined wind speed/ category. The amount is predefined in the payout table.

1

Client chooses radius to create one or more circles around the insured location.

2

If a cyclone tracks through the circle…

3

a payout is triggered depending on the predetermined wind speed/ category. The amount is predefined in the payout table.

When to contact us?

Contact us up until one month before the start of a cyclone season in your basin.

Data we will need from you:

  • Location to be insured
  • Sum insured

Case study

Example of a parametric cover for an airport in the USA

Client need

An airport in Key West is looking for an insurance solution against a potential cyclone that could lead to not only property damage but also to a decline in passenger traffic and increased operating costs.

Pain point: high level of deductibles of traditional coverage and Non-physical Damage Business Interruption exclusions.

Our solution

CYCLONE Protection is structured using “Cat in a circle” concept. Together with the client we have chosen to create two circles of 25 and 50 mi radii around the airport’s location. We have agreed upon the payout structure according to the cyclone’s scale and path.

The result

In 2017, hurricane IRMA reached Category 4 scale and tracked through the 25mi circle. As a result, the client received 75% of the Sum Insured from AXA Climate.