Parametric Solution For Hurricane Events Presented at IDF

The latest from Skyline Partners for you;

Skyline Partners’ parametric insurance solution for the Jamaican Cooperative Credit Union League (JCCUL), underwritten by Munich Re, was presented last week at the joint Insurance Development Forum (IDF) – World Bank Knowledge Hub Day held in Venice. The workshop was attended by several of the World Bank Crisis and Disaster Risk Financing Team’s client countries to foster greater interaction between those countries and companies in the insurance industry.

The innovative coverage, which paid out in response to Hurricane Beryl, protects farmers by allowing them to take a payment holiday in the event that extreme weather impacts their location. Storms are a common cause of debilitating crop damage, which impairs farmers’ ability to repay microloans. Skyline Partners Ltd., the parametric insurance catalyser, deployed its well calibrated FatTrackTM trigger mechanism under the JCCUL policy to better reflect loss-event experience on the ground, thereby reducing basis risk.

Whilst presenting the case study, Alastair Norris, Climate and Disaster Risk Consultant for the IDF said: “This case study shows how policy design and structure are critical to meeting the expectations of all stakeholders. The coverage designed by Skyline was intended to pay out when a storm affected borrowers’ ability to repay their loans. Through this product, smallholder farmers and the JCCUL were financially protected from the impacts of Hurricane Beryl. This in turn enabled jobs and livelihoods to be sustained in the aftermath.”

Laurent Sabatié says: “Parametric triggers and policies are evolving and improving to match actual loss experience. FatTrack is just one example of several triggers we have developed to expand the parametric toolkit. We’ve created and deployed another for wildfire, for example. These innovative mechanisms allow insurance and reinsurance buyers to benefit from coverage that meets their diverse needs much more precisely than first-generation parametric products.”