PriyaPatel
TLDR:
Key points:
- Parametric insurance payout triggered by FatTrack technology for crop claims
- Payout was due to Hurricane Beryl passing close to Jamaica in 2024
Summary:
FatTrack technology, developed by Skyline Partners, triggered a payout on parametric insurance policies for crop claims due to Hurricane Beryl passing close to Jamaica in 2024. Munich Re, one of the world’s leading risk solution providers, paid a claim to the Jamaican Co-operative Credit Union League (JCCUL) under the parametric insurance policy issued in April 2022. This innovative coverage protects farmers by allowing them to take a payment holiday in the event of extreme weather that impairs their ability to repay micro-loans.
Unlike other event-triggered insurances, the FatTrack trigger mechanism responds to the dynamic nature of hurricane events, making it more reflective of actual conditions on the ground. The payout was calculated based on the percentage of insured location-tiles hit by the hurricane and the hurricane’s category as it entered the tile. In the case of Hurricane Beryl, 45% of the total policy value was paid to JCCUL, demonstrating the effectiveness of trigger calibration in creating well-aligned parametric insurance products.
According to Skyline’s Co-Founder Laurent Sabatié, the payment for Hurricane Beryl in Jamaica serves as a strong endorsement of FatTrack for all parties involved. This successful payout not only provides confidence to lenders requiring borrowers to secure insurance but also showcases the efficiency and effectiveness of parametric insurance tailored to specific exposures. The payout supports the Jamaican farming community during a time of crisis and highlights the potential benefits of parametric solutions in the insurance industry.
