Global specialty reinsurer Chaucer has partnered with parametric insurtech start-up, Yokahu to launch a new microinsurance product, which will provide cover following hurricane events in the Caribbean.
In a statement, Chaucer said that the new product will “tackle the problem of underinsurance in the region, where the insurance gap is estimated to be $50 billion.”
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“Parametric insurance products offer pre-specified pay-outs when a trigger event occurs,” Chaucer said in its statement. “In the event of a hurricane, Yokahu monitors wind speed at customers’ locations and the atmospheric pressure at the centre of a hurricane, this speeds up the rate at which payment can be issued. If these reach pre-agreed limits, payment will be issued to the policyholder within a maximum of 10 days following the hurricane, although often within 24 hours.
“The Caribbean is one of the most underinsured regions in the world and climate change is only making the problem worse,” said Ed Lines, active underwriter of Syndicate 1085 at Chaucer. “The reality is that traditional insurance products are simply not an option for many in the region. This product will help to close the insurance gap, giving people greater peace of mind.”
“We’re delighted to be working with Chaucer to help protect at-risk island communities and help address the protection gap,” said Tim McCosh, chief executive officer of Yokahu. “The average cost of hurricane insurance is inaccessible to most people, with traditional hurricane insurance products requiring people to pay premiums against the value of their homes. Our parametric approach means that a claims payout is determined by the severity of the event at hand – and therefore can be triggered automatically. We have arranged these funds to be transferred to the claimant’s mobile phone, so they have easy access to funds when it matters most.”