When parametric insurance wants to cover hurricanes better

The reinsurer Swiss RE, the parametric platform to ensure flood risks not covered Floodbase and the insurer Aon recently formalized their partnership. Their rapprochement aims to launch a new parametric solution to better cover insured people against storms and hurricanes in the United States.

FACTS

• The new joint offer of the three partners was recently launched in the parametric insurance market. It was designed to treat and cover losses caused by storms and hurricanes that regularly hit the coasts of the United States.

• This solution is based, among other things, on a broad meteorological database to assess the potential severity of storms and hurricanes on the American coast.

• The new parametric insurance thus triggers its repayments according to the water levels recorded during the storms, i.e. it takes into account the level of rise of the sea.

• This allows insured persons to select the level of compensation they consider necessary depending on the level of sea rise. A personalized rate is then calculated accordingly.

ISSUES

• Cover a major risk : By the end of 2024, the American coast, and more particularly the state of Florida, was affected by Hurricane Milton. The governor of the state of Florida and the then American president had then underlined According to one study, Milton's rainfall had been nearly 30% higher due to climate change. In addition to the loss of life, the hurricane had generated over $50 billion in property damage. According to Aon's Climate and Disaster Insight 2025 report, however, Hurricane Helene was the most devastating natural disaster of 2024 in the United States, causing about $75 billion in economic losses, mainly due to domestic and coastal flooding.

• Better protectionr: In their view, the new parametric protection offer of the three new partners is intended to fill the gaps in the protection offered by traditional insurance policies. This new offer promises faster repayments and enhanced protection, especially for US coastal companies

PERSPECTIVE

• The emergence of parametric insurance has led to the creation of a full market. For example, according to the international market research and management consulting company Global Market Insights Inc., the parametric insurance market was Assessed $148 billion in 2023. And the prospects for growth are particularly important, notably due to the increasing adoption of the latest Internet of Things (IoT) technologies of artificial intelligence (AI) or automatic learning algorithms (ML). The average annual growth rate is expected to be over 11.5% between 2024 and 2032.

• Many offers have been made in recent years at the international level, such as the Lemonade in Africa for Agriculture, Blink Parametric for travel, or from Descartes to France, for cover cyber risks.

• Recently, it was also the American payments giant Visa who chose to Supporting on a partnership signed with an assurtech specialized in on-board and on-demand insurance, Companjon, to offer additional protection against adverse weather conditions in Europe. This solution, called "Weather Protection", allows Visa cardholders to add insurance when purchasing products or services that may be affected by weather, such as outdoor concerts or hotel reservations.

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