Insurance and reinsurance marketplace Lloyd’s has announced the launch of a retail parametric cyclone insurance product in Northern Australia.
The new solution, called Redicova, is supported by the Lloyd’s Disaster Risk Facility (DRF), an initiative designed to help build resilience by closing protection gaps around the world.
The product is led by Beazley with initial reinsurance support from AXA XL, Hiscox and RenaissanceRe who are all members of the DRF at Lloyd’s.
Redicova is a parametric product that provides pay-outs in relation to windspeeds from a severe tropical cyclone, with the aim of supplying fast financial relief to impacted communities to assist in natural disaster recovery.
Lloyd’s explained that pay-outs will be based on track maps that follow cyclones and plot their journey when they reach and continue over land, utilising underlying data from the Australian Bureau of Meteorology, in collaboration with Jeremy Benn Pacific, part of global science and engineering firm JBA Group.
“We’re delighted to provide a new solution at a time where both industry and government are working on issues of affordability and availability of insurance in Northern Australia,” said Chris Mackinnon, Lloyd’s Regional Head of Australia & New Zealand. “Redicova will provide fast support for local communities and businesses in Northern Australia who are impacted by severe tropical cyclones.”
Karen Hardy, Redicova Managing Director, also commented: ‘It’s a privilege to work with Lloyd’s, Tysers, Beazley and others to deliver Redicova to Northern Australia. Redicova will provide fast disaster recovery cash to communities after a severe tropical cyclone, enabling resilience, so they can get on with life.”
Alex Hardy, Head of Property Covers at Beazley, added: “Our support for this new parametric cyclone product in Australia demonstrates Beazley’s commitment to providing new and responsive solutions to customers who could be adversely impacted by climate change.”
“The application of data and insurance insight to create an insurance solution that responds quickly and efficiently at the point of a loss is a great example of taking an innovative and client-centric approach to risk mitigation to help support clients at the time when they need us most.”
