A new index-based insurance product has been rolled out by Swiss Re Corporate Solutions.
Called FLOW, the parametric water-level cover protects against the financial impact of high or low river water levels. Part of the company’s innovative risk solutions offering, the product provides payout of fixed amounts based on a defined index instead of relying on loss investigations and adjudication.
FLOW uses an index formula which references measured water levels at defined river gauges, with each contract tailor-made to the policyholder’s exposure. The Swiss Re unit said the customised index tracks individual water level exposure related to revenue and costs.
Financial repercussions include increased costs due to risk mitigation measures.
“The very dry and warm summer of 2018 left the water levels of most rivers in Europe at record lows,” noted Thomas Keist, head marketing innovative risk solutions EMEA. “Decreased production volume and increased transportation costs were the consequence.
“Since it is at the heart of our business to insure companies impacted by the effects of natural perils such as drought and heat, we developed FLOW to help them cope with risks like the loss of revenue due to business interruption from high or low water levels.”
FLOW is available in the UK as well as in the European markets of Belgium, France, Germany, Italy, Luxembourg, the Netherlands, the Nordics, Portugal, Spain, and Switzerland.