The New Zealand insurance leader, Tower Insurance, has begun its pilot scheme of a cyclone parametric product which is being trialed in two villages in Fiji.
The cover, which will be rolled out to Tonga and Vanuatu, as well as other Pacific markets, is called Cyclone Response Cover and provides a rapid cash pay-out when a customer is impacted by a high wind speed cyclone event.
This is regardless of the damage and without the need for an insurance assessor’s signoff.
Data shows that Cyclone Yasa caused US$334.13mn in damage in 2020 and impacted 97,000 people. In 2016, cyclone Winston caused more than$1.34bn in damage across 350,000 people
New parametric cover for cyclone-vulnerable areas
According to reports, customers of the pilot, launched in collaboration with the United Nations Capital Development Fund, can choose from three products ranging in price from $1000 to $3000, depending on the level of cover.
The pilot scheme is taking place in Ketei Village on Totoya Island and Kavala Village in Kadavu for the current cyclone season. Tower is working with local financial institutions and says Cyclone Response Cover will be available in Fiji for the 2023/2024 season.
Speaking about the new pilot scheme, Tower Head of Pacific Digital Distribution Veilawa Rereiwasaliwa said: “Cyclone Response Cover will lessen the burden on local villages and their support networks, enabling them to recover from cyclone damage quickly. Tower is so proud to be launching this product. We’re doing what’s right.
He added, “You are guaranteed to be paid out if a cyclone meets certain criteria in your area, no questions asked, and no insurance assessment needed. We aim to process payments within seven days.”.