After several years of conducting underwriting for parametric insurance in LATAM and the Caribbean, we have established new alliances with capacity providers and technology partners to expand our operations to Florida, where we are able to offer the most robust parametric product.
Miami, Florida – As climate-related weather risks become increasingly complex and unpredictable, the demand for innovative parametric insurance structures is on the rise. In response to this trend, XS Global is introducing parametric insurance products in Florida, the hurricane capital of the USA. The target audience for whom we are developing this insurance includes medium-sized enterprises, retail businesses, high-net-worth individuals, and luxury homeowners.
Our parametric product is derived through the utilization of parameters obtained from post-event analysis of hurricanes, facilitated by a reporting agency that continuously monitors the storm. Employing a well-defined methodology at multiple time intervals of the storm, we produce a wind index that measures the impact on a specific property.
As parametric policies are indexed to a data source, they provide fast payouts, high flexibility, better financial planning, and the option to provide coverage for losses that extend beyond just the property. “It ensures a win for everyone because instead of insuring customers based on the number of losses suffered, it ensures against the magnitude of the storm so the process is more efficient for both the insurer and the insured”, explains Alejandro Solorzano, XS Global ART Director Manager.
What differentiates XS Global parametric product from others is its flexibility and the fact that it can be customized to meet each clients specific requirements. For instance, in a major hurricane such as Ian in 2022, the wind index could trigger policies even if the hurricanes path is a hundred miles away from the insured location.
In Florida, any major hurricane impacts insurance policy prices throughout the entire state, not just the specific location affected by the storm. Therefore, parametric payments like those offered by XS Global are a great tool to complement and cover increases that occur in traditional insurance. “They help clients become more resilient and better prepared for any financial difficulties that may arise after the storm, as well as for premium increases”, stated Alejandro Solarzano