Underwriter Liberty Specialty Markets has created a parametric solution for a tomato grower to protect a glasshouse worth $4 million from wind damage.  

Liberty created a payout table based on maximum windspeed at the location, Liberty Specialty Markets Asia Pacific weather team chief Michael Lincoln tells insuranceNEWS.com.au. 

If the windspeed is over 100km an hour, the policy triggers and a payout will be made in 14 days, with the amount varying based on the highest windspeed recorded. Typical premiums for parametric policies range between $5000 to $50,000. 

 “Often we’re dealing with smaller businesses who want to protect their income or assets that can’t be addressed by a traditional insurance policy,” Mr Lincoln said.  

“It generally all starts with a client nominating their desired sum insured for a weather peril. Liberty’s Weather underwriters then work with their broker to determine the trigger level and payout table, adjusting accordingly to meet their policy price appetite.”  

Liberty has been pioneering parametric weather insurance solutions for four years in Australia, helping protect winemakers from smoke taint, forestry plantations from bushfire and construction companies from wind and rain. 

Sugarcane farmers in Queensland cover yield shortfalls caused by reduced application of fertiliser, sold exclusively by WTW, saving urea input costs while protecting against any profit loss from lower nitrogen use. 

“Over the past five years Liberty has pioneered a range of parametric insurance solutions for industry sectors based on the different weather perils they face. These include bespoke covers specifically designed to protect vineyards, forestry plantations, construction sites, airports, event operators and crop farmers,” Mr Lincoln said. 

Liberty is getting more enquiries, particularly as traditional property markets pull out of markets due to unresolvable loss ratios, he says, with the speed of payout a major drawcard.  

In recent years some property bushfire claims have taken 18 months or more to settle. With parametric products, there is no need for a loss adjustor to attend site. 

“The claims process is fast and straightforward as it’s based on data, and clients value the recovery speed,” Mr Lincoln said.  

The window for vineyard smoke taint and forestry plantation bushfire policies for the 23/24 summer season is rapidly closing, and Liberty says brokers should secure terms quickly if they want cover for this season.