Management Consulting
Aon
Full Credential Description
**Case Study: Parametric Insurance for a Technology Firm** A technology firm faced significant challenges in securing business interruption coverage due to its unique exposure to tornado risks. Traditional property insurance markets were unable to provide the necessary coverage, leaving the firm vulnerable to potential operational disruptions. To address this issue, the broker collaborated closely with the client to design a tailored parametric insurance solution specifically for tornado coverage. This innovative approach allowed the firm to obtain coverage that was previously unobtainable through conventional insurance channels. As a result of implementing this parametric insurance solution, the client gained an alternative source of capacity and risk transfer that effectively mitigated their exposure to tornado-related business interruptions. This strategic move not only filled a critical gap in their risk management program but also enhanced their overall resilience against natural disasters. **Case Study: Parametric Insurance for a Coastal Municipality** A coastal municipality was grappling with the limitations of its traditional property policy, particularly concerning sub-limits that significantly restricted recovery following a recent hurricane. The municipality was uncomfortable with the financial burden imposed by these limitations, especially in the aftermath of a natural disaster. In response, the broker developed a customized parametric hurricane policy designed to supplement the existing debris removal sub-limits. This policy also included provisions to provide funds for addressing beach erosion issues that were not covered by the U.S. Federal Emergency Management Agency (FEMA). The implementation of this parametric solution resulted in a decreased risk burden for the municipality, which was already operating on a tight budget. Additionally, it alleviated the financial pressure on taxpayers and facilitated a more efficient allocation of capital for recovery efforts. This case exemplifies how parametric insurance can effectively address protection gaps in traditional policies, providing municipalities with the financial resources needed to respond to natural disasters.