By Claire Wilkinson
Swiss Re Corporate Solutions has launched a parametric hail coverage designed to protect U.S. businesses in hail-prone states from the financial impact of a significant storm and to address gaps in traditional insurance coverage.
HAIL will cover physical damage, lost revenue from business interruption or significant retentions in traditional property policies, Swiss Re said in a statement Wednesday.
Swiss Re has signed an agreement with Irvine, California-based CoreLogic to use its hail data to verify the maximum hail size both at the location and in the surrounding area to determine whether the policy is triggered.
The parametric cover will focus on auto, real estate and public entity sectors, but is available to businesses operating in 11 hail-prone states (Colorado, Illinois, Indiana, Iowa, Kansas, Minnesota, Montana, Nebraska, Oklahoma, South Dakota and Texas), Swiss Re said.
Each policy limit will be determined based on the exposure, geographic location and the specific needs of the policyholder, a Swiss Re spokesperson said via email.
Like other parametric covers, HAIL combines the policyholder location data with a payout table with policy amounts based on reported hail size at a given site, Swiss Re said.
When a policyholder has hail damage and the parametric policy is triggered, rather than waiting for a loss evaluation, the payment follows soon afterward.
“The speed of payout, transparency in claims adjustment, and flexibility in the use of the funds make this a powerful tool to supplement traditional insurance policies or to buy as a standalone product if traditional coverage is less available,” Cole Mayer, vice president innovative risk solutions at Swiss Re, said in the statement.