Aon Launches Parametric Insurance for Hurricane Storm Surge Protection
Aon plc has launched a new parametric insurance solution with Floodbase and Swiss Re to address commercial losses from hurricane-related storm surges. This product fills gaps left by traditional insurance policies, especially concerning high deductibles and exclusions. Parametric insurance enables quicker payouts based on predetermined storm surge heights, enhancing financial protection for businesses exposed to hurricane risks.
Aon plc has introduced a novel parametric insurance solution aimed at mitigating commercial losses associated with hurricane-related storm surges along the U.S. coast. This innovative product, developed in collaboration with Floodbase, a parametric flood insurance provider, and Swiss Re Corporate Solutions, seeks to bridge the protection gaps present in traditional insurance policies, which often impose high deductibles and significant exclusions regarding storm surge risks.
The emergence of this new parametric insurance product comes in light of the substantial economic impacts of hurricanes, with Hurricane Helene representing the most catastrophic event of 2024, incurring approximately $75 billion in losses due primarily to flooding. Insurers faced claims totaling about $37.5 billion related to hurricanes Helene and Milton, signifying the pressing need for enhanced coverage options in hurricane-prone areas. Parametric insurance offers a solution where payouts are triggered by specific meteorological data rather than traditional loss assessment.
In summary, Aon’s collaboration with Floodbase and Swiss Re marks a significant advancement in the provision of insurance for hurricane-related storm surges. The parametric solution offers a swift, transparent, and flexible response to financial losses, supporting both corporate and public entity risk management strategies. This product reflects a growing trend towards innovative insurance solutions that cater to evolving market needs in the face of natural disasters.
Original Source: www.insurancejournal.com
