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Lloyd’s launches parametric cyclone insurance product in Australia

A photograph of the Lloyds Building in London from ground up

Lloyd’s has launched the first retail parametric cyclone insurance product in northern Australia, which provides pay-outs in relation to windspeeds from a severe tropical cyclone.

Redicova, the new product, is supported by the Lloyd’s Disaster Risk Facility (DRF), an initiative designed to help build resilience by closing insurance protection gaps around the world.

Beazley is leading the product with initial reinsurance from Axa XL, Hiscox and RenaissanceRe which are all members of the DRF at Lloyd’s.

In announcing the launch, Lloyd’s said Redicova is an autonomous product which will quickly pay claims that are triggered without the need for physical assessment. It added that the product will help individuals, SMEs and agricultural enterprises in northern Australia.

Redicova uses track maps, which follow cyclones and plots their journey when they reach and continue over land, and makes payouts based on the maps that use underlying data from the Australian Bureau of Meteorology.

The data is provided in collaboration with Jeremy Benn Pacific, part of JBA Group, the global science and engineering firm.

Chris Mackinnon, Lloyd’s regional head of Australia and New Zealand, said: “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.

“Redicova will provide fast support for local communities and businesses in northern Australia who are impacted by severe tropical cyclones.”

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