As Queensland remains vulnerable to extreme weather events, Redicova managing director and broker Karen Hardy shared with Insurance Business Australia TV (IBTV) how her parametric creation helped the state become more resilient to cyclones.
In an interview with IB, Hardy explained that the people in her town of Tully in north Queensland depend on agriculture, particularly bananas and sugarcane, which can be vulnerable to extreme weather events.
However, traditional cyclone insurance is expensive, compelling Hardy to develop a parametric product to help small communities face cyclones without breaking the bank.
“Redicova is a very simple product available to all northern Australians between Bundaberg in Queensland over to Carnarvon in Western Australia and including the Northern Territory,” Hardy told IB. “If you're located within 300 kilometres of the coastline, you're eligible. People can buy units of cover so that they can afford or purchase as they can afford, rather than be told that they have to insure for a certain amount.”
“It's based on the insured's address, the actual insured address, [and] proximity to severe tropical cyclones – so, if the BOM [Bureau of Meteorology] records a cyclone that passes over their insured address, they're paid 100%.”
Hardy said parametric insurance is “definitely a way of the future, particularly for different types of risk.”
“The traditional insurance market is tied because of its indemnity conditions; assessments need to occur, and the problem is we don't have enough assessors in the world to actually be responsive and respond quickly after a natural disaster,” she said. “So, I believe that parametric has a place in the market.”
Learn more about parametric insurance and Redicova's product by watching the IBTV episode: Cyclone fight: a Queensland broker's parametric creation.
