Arbol, a global climate risk solutions platform, has delivered $20 million payouts for parametric reinsurance programs triggered by Hurricane Milton in Florida within a month after landfall.
The parametric reinsurance programs, designed to protect insurers against named storm risks in Florida, were triggered when Hurricane Milton made landfall near Siesta Key on October 9, 2024, as a Category 3 storm with sustained winds of 120 mph.
The rapid payouts, Arbol highlighted, show how well parametric insurance works to get money to people fast after a big disaster.
Deanne Nixon, Senior Reinsurance Adviser, Arbol, commented: “The immediacy of these parametric payouts fundamentally changes how insurers can respond to catastrophic events.
“While the industry grapples with processing hundreds of thousands of claims from Hurricane Milton, our parametric programs have already delivered critical financial support to insurers, enabling them to better serve their policyholders during this essential recovery window.”
Arbol’s parametric reinsurance solution calculates payouts based on predefined, objective parameters tailored to each client.
The program determines losses at the insured location level, considering the distance of each insured location from the hurricane track and the maximum sustained wind speeds recorded.
Current estimates indicate Hurricane Milton could result in more than $15 billion in insured losses across Florida, with insurers reporting nearly 300,000 claims.
Compared to traditional reinsurance claims processing, which usually extend over many months for disasters of this scale, Arbol’s parametric reinsurance solutions provide rapid, efficient settlement based on objective data triggers.
Arbol’s parametric reinsurance continues to demonstrate its value in protecting insurers in hurricane-prone regions, ensuring financial resilience against climate risks, the firm stated.
This follows their expansion in coastal insurance markets with the launch of Lilypad Insurance and acquisition of Centauri Specialty and Centauri National.
These strategic moves combine traditional and parametric solutions to address the growing coverage gap in vulnerable coastal communities.
“Arbol’s rapid response to Hurricane Milton demonstrates why we’re expanding our presence in coastal markets,” said Sid Jha, Founder and CEO, Arbol. “As traditional insurers and reinsurers continue to withdraw from climate-vulnerable regions and increase attachment points, our combination of parametric solutions and strategic initiatives like Lilypad Insurance offers a sustainable path forward for maintaining vital coverage in these communities.”
