Descartes Underwriting, the Paris-based parametric insurtech, has partnered with Reask, the tropical cyclone modeling company.
The partnership aims to expand the availability and advancement of parametric cyclone insurance products by combining Descartes’ ability to integrate new technologies into the design of parametric insurance products with wind data provided by insurtech Reask , based in Sydney.
This partnership also aims to close the insurance protection gap by expanding global parametric cyclone coverage, Descartes said, explaining that the consistent global coverage of Reask’s tropical cyclone product, Metryc, enables policy expansion. parametric insurance in regions and geographies where data limitations have hampered precedents. blanket.
Additionally, Reask’s ability to augment barely available ground-level observations and provide high-resolution wind hazard intensity measurements within days of an event greatly supports the deployment of Descartes’ parametric products.
As natural disasters and extreme weather hazards evolve due to climate change, the inherent difficulties of obtaining accurate data due to the destructive nature of hurricane activity are also likely to be heightened. The partnership between Descartes Underwriting and Reask aims to address these challenges as science teams from both organizations collaborate and apply machine learning to improve models of the interaction between the wind field and the terrain of tropical cyclones.
Descartes recently raised $120 million to expand its parametric product offering. Additionally, Descartes Underwriting has been working with Generali Global Corporate & Commercial since 2020 to improve corporate adoption of parametric risk transfer solutions globally.
The named storms pose a major threat to businesses, communities and public entities in coastal megacities, deltas and islands, the company said. For example, in the last year alone, economic losses caused by cyclones are estimated to have reached $78 billion worldwide, with 68% of the losses ($53 billion) not covered by an insurance. Even in the most established North American market, Hurricane Ida, which had an estimated economic impact of US$95 billion, exemplifies the storm coverage gap, with only US$30 billion or 32% of insured losses. , explained Descartes.
“The scarcity of data in some regions remains a driving factor in delivering parametric insurance coverages that improve resilience. Reask is leading the charge in its ability to quickly capture a windstorm event or provide wind location maps in certain areas, such as the South Pacific, where data is less accessible,” said Kevin Dedieu, co-founder and head of R&D at Descartes Underwriting.
“Accurate, high-quality data is a prerequisite for all parametric insurance structures. Onsite wind data, such as that provided by Reask, amplifies personalization and reduces basis risk in game-changing ways, benefiting parametric insurance providers, brokers, reinsurers and insurance managers. risks to public entities and private sector customers around the world,” he said. continued.
“Our Metryc solution enables the transfer of financial risk to all corners of the world, broadening the reach of parametric insurance solutions such as those provided by Descartes Underwriting,” commented Thomas Loridan, co-founder and CEO of Reask. “It is through our machine learning approach to wind modeling that Metryc can be used as a reliable third-party view of tropical cyclone wind speed data, even in regions where observations are sparse.”
About Descartes Subscription
Offering a new generation of technology-driven parametric insurance, Descartes works with brokers to protect their public sector and corporate clients against the full spectrum of natural disasters and extreme weather exposures, including named storms. Descartes covers are designed to fill the gaps left by traditional insurance, providing cost-effective and fully transparent products that guarantee liquidity through fast and direct payment. Born from the belief that climate change calls for a revolutionary approach to insurance, Descartes is a Managing General Agent, backed by a panel of leading risk carriers and can provide $200 million per policy. Based in Paris, Descartes Underwriting also has offices in Singapore, Sydney, New York, Houston and London.
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