Marsh launches business insurance product to address windstorm exposures Marsh has announced it has launched a parametric insurance product to address financial exposures faced by businesses due to hurricane-force winds. The new product was developed in conjunction with Risk Management Solutions (RMS), a catastrophe modeling organization, and WeatherFlow, Inc., owner and operator of a network of wind monitoring stations. The product, known as WindX-SI, provides indemnification for economic losses that result when a named storm generates winds that exceed a specified velocity within a defined vicinity of a business location. Coverage is triggered by the combination of two events: 1) The wind speed exceeds a defined velocity, and 2) The business suffers a related financial loss. WindX-SI utilizes the WindX parametric index solution (www.windxindex.com) launched by RMS and WeatherFlow during the 2007 hurricane season. The WindX solution is utilized to trigger a wide range of risk transfer contracts including over-the-counter derivatives, catastrophe bonds, and industry loss warranties. Marsh has now created an insurance product that allows insureds to buy protection based on either the existing WeatherFlow network of wind monitoring stations or based on a new station installed on the insured’s premises. WindX-SI can provide up to $25 million of aggregate coverage from the lead insurer and additional limits may be available utilizing other markets. Pricing is based on a variety of market and risk factors, including wind probabilities developed by RMS, and client-specific risk factors. "The severe hurricane seasons that have occurred along the US Eastern Seaboard and Gulf Coast in recent years have had a multi-billion dollar impact on businesses in various sectors, including energy, processing, manufacturing, mercantile, hospitality, gaming, and health care. Many businesses suffered a substantial financial impact and had minimal, if any, substantial coverage due to the lack of a physical damage trigger to their property," said Robert Howe, a managing director of Marsh and head of the firm’s Global Property and Multinational Practice. "In addition, firms with insurance found that claim negotiations were lengthy, and windstorm deductibles, which are typically written as a percentage of insured value, quickly amounted to millions of dollars. "WindX-SI is designed to make claims settlement easier as the triggers of coverage are a verifiable measurement of wind speed and an indemnity trigger which are defined specifically for each insured. Additionally, it helps to fill gaps in coverage, including within the standard property insurance deductible, and to meet the needs of large and mid-sized businesses whose financial performance is vulnerable to wind events," he added.
•Date: 31st March 2008• Region: US •Type: Article •Topic: DR general
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