Aon plc, in collaboration with parametric flood expert Floodbase and Swiss Re Corporate Solutions, announced on February 5, 2025, the launch of a new parametric insurance solution. This solution is designed to address and mitigate losses from hurricane-related storm surge along the U.S. coast. It aims to bridge protection gaps in traditional insurance policies, which often have high deductibles or significant exclusions for storm surge risk.
According to Aon's 2025 Climate and Catastrophe Insight report, Hurricane Helene was the most devastating natural catastrophe event of 2024, causing an estimated $75 billion in economic loss, largely due to U.S. inland and coastal flooding. The new parametric solution utilizes meteorological data sources to assess hurricane-related storm surge inundation. Cole Mayer, head of parametric solutions at Aon, stated that storm surge can be a significant driver of losses for various entities.
Unlike indemnity insurance, this parametric solution bases payouts on water height, allowing policyholders to select their desired payout level for specific storm surge thresholds. The proceeds can be used for any financial loss associated with the event, offering broader coverage than traditional policies. This innovation is part of Aon's suite of product offerings designed to provide comprehensive sources of liquidity for clients.
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