Northern Australian based Redicova has introduced retail parametric insurance cover backed by Lloyd’s to provide rapid assistance payments after tropical cyclones.

The cover allows policyholders to buy units with an agreed sum insured of $1000 per unit, providing insurance protection for individuals and businesses in the event of “very destructive winds” associated with severe cyclones of at least category three strength.

Redicova MD Karen Hardy says the parametric cover will provide faster payments compared with traditional insurance, ensuring support during a critical period.

“The time between event and traditional claim settlement can be months or sometimes years. These delays erode community resilience and dignity,” she said today. “Redicova will help bridge the financial gap between community needs and existing support services.”

Redicova will notify policyholders electronically when they are eligible to claim, based on cyclone event data and the insurance location.

Payouts are based on cyclone track maps and underlying Bureau of Meteorology data, provided in collaboration with Jeremy Benn Pacific, part of science and engineering firm JBA Group.

Cover is supported by the Lloyd’s Disaster Risk Facility (DRF), an initiative aimed at closing the protection gap through building resilience against natural disasters.

Redicover says Lloyd’s broker Tysers gathered support from DRF syndicate members Beazley, Axa XL, Hiscox and Renaissance Re, together with Hannover Re, INIGO and Agora.

“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,” Lloyd’s Regional Head of Australia and New Zealand Chris Mackinnon said.

The Redicova website says cover is provided for financial or economic loss, including property damage or personal injury, as a result of the cyclonic winds.

A payment of 100% is made when the situation is within the operational track map “very destructive wind zone”, while a 30% payment will be made within a 5km buffer zone.

The Bureau of Meteorology defines “very destructive winds” as events with maximum wind gusts over land of at least 165 km/h.

Redicova says payment scenarios could include an employee who suddenly doesn’t have any income as their workplace has been damaged; or a business owner who can’t operate because an event has affected the local area and customers.

Unit prices are tiered, based on location and potential exposure to severe tropical cyclones. The cover, which is payable regardless of other insurance, doesn’t include flood or other perils.