Aon plc said it has launched a new parametric insurance solution designed to address and mitigate commercial losses from hurricane-related storm surge along the coast of the U.S.
Developed with parametric flood insurance provider Floodbase and Swiss Re Corporate Solutions, the new product can help bridge protection gaps in traditional insurance policies, which may demand high deductibles or include significant exclusions in policy wordings for storm surge risk, Aon said.
According to Aon’s 2025 , Hurricane Helene was the most devastating natural catastrophe event of 2024, estimated to have caused about $75 billion in economic loss, mainly due to U.S. inland and coastal flooding. For insurers, damage from hurricanes Helene and Milton resulted in approximately $37.5 billion of claims, including pay-outs from the National Flood Å˽ðÁ«´«Ã½Ó³» Program.
For some hurricane events, storm surge damage can account for more than a third of the total loss cost. Cole Meyer, head of Aon’s parametric solutions, said the brokerage’s data show storm surge “can be a significant driver of losses for corporates, public entities and (re)insurers alike, so we developed this collaborative parametric solution to help bolster existing levels of cover.”
Parametric insurance can be a standalone product or it can be used with other insurance policies.
In contrast to an indemnity insurance product, a parametric solution is based on water height, allowing policyholders to select the level of pay-out they require for a certain level of storm surge, with a rate calculated accordingly. The proceeds can be used for any financial loss associated with the event. A variety of meteorological data sources are used to assess hurricane-related storm surge inundation.
“Parametric insurance provides a fast, flexible and transparent way to cover financial losses caused by natural catastrophes,” said Martin Hotz, head parametric natural catastrophe at Swiss Re Corporate Solutions. “With this innovative solution we can better assist corporations in exposed areas with a rapidly-paying cover that fits their individual risk management strategies.”
Topics Catastrophe Natural Disasters USA Flood Windstorm Hurricane Aon
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