Descartes Underwriting (Descartes), the largest independent parametric-specialized firm, has partnered with ICEYE, which owns the world's largest synthetic-aperture radar constellation, to boost its flood risk modelling and global offering of parametric flood insurance.
The partnership will combine Descartes' ability to incorporate state-of-the-art technology into parametric insurance product design with ICEYE's synthetic-aperture radar (SAR) flood data and monitoring capabilities.
The partnership also allows Descartes to establish precise parametric triggers for a larger global client base and make swift claims payments based on exact client locations within a flood event.
Sebastian Piguet, the co-founder & head of underwriting at Descartes, commented: “We consider access to accurate data, provided by an independent third party, to be a prerequisite for all parametric insurance contracts. We are thus delighted to partner with ICEYE to advance the frontier of parametric flood insurance and expand our offering to a wider geographic client-base based on ICEYE's data.”
According to Descartes, flood is one of the most costly and recurrent natural hazards globally, especially as the impacts of climate change worsen.
As a result, accurate assessment and data coverage for areas with granular elevation changes, or rapidly expanding impervious surfaces, pose technical hurdles for insurers. Data loss and inaccuracies during flood events due to the inherent vulnerabilities of physical flood gauges and sensors can also present challenges when it comes to insurance pricing and claims processing.
Lisa Wardlaw, global head of insurance solutions at ICEYE, said the company's global flood monitoring solutions consistently provide data on whether a given parameter has been met or exceeded at any location worldwide.
“The climate crisis calls for a revolutionary approach to insurance that fuses science, data, and finance,” she added. “We are proud to partner with Descartes, a company that shares our commitment to innovation.”