The Lloyd’s Disaster Risk Facility has launched the first retail parametric cyclone insurance product in Northern Australia.
Led by Beazley with initial reinsurance support from AXA XL, Hiscox and RenaissanceRe, Redicova, is a parametric product that provides pay-outs in relation to windspeeds from a severe tropical cyclone.
Chris Mackinnon, Lloyd’s regional head of Australia and New Zealand, said: “We’re delighted to provide a new solution at a time where both industry and government are working on issues of affordability and availability of insurance in Northern Australia. Redicova will provide fast support for local communities and businesses in Northern Australia who are impacted by severe tropical cyclones.”
Karen Hardy, Redicova managing director, added: ‘It’s a privilege to work with Lloyd’s, Tysers, Beazley and others to deliver Redicova to Northern Australia. Redicova will provide fast disaster recovery cash to communities after a severe tropical cyclone, enabling resilience, so they can get on with life.”
Parametric products make pay-outs based on indices rather than indemnifying the actual loss incurred. The autonomous product will quickly pay claims that are triggered without the need for physical assessment.
Redicova uses sophisticated track maps that follow cyclones and plots their journey when they reach and continue over land. Pay-outs are based on these track maps making use of underlying data from the Australian Bureau of Meteorology. Fata is provided by Jeremy Benn Pacific, part of JBA Group.
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