Quick Cash, Few Questions: Insurers Pitch Wild Storms Protection
- Governments now targeted by insurance tied only to wind speed
- Speedy payout can be used for anything, if you beat the metric
A home damaged by Hurricane Irma in Naples, Florida.
Photographer: Scott McIntyre/Bloomberg
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Some of the world’s largest insurers are eagerly pitching cities, states and even school districts on policies designed to pay out quickly with few questions in the event of extreme weather. The catch: Even a hurricane might not be extreme enough.
It’s called parametric insurance, and it aims to provide a quick-cash payout within days after a storm hits, beating federal disaster aid to the punch with no restrictions on the money’s use. Among the recent clients of reinsurer Swiss Re AG are Louisiana, one of the most hurricane-prone states, and the Miami-Dade County school board.