Extreme weather can dramatically impact businesses, with the potential to influence their bottom line and ongoing operations.
Natural catastrophes are also increasing, both in frequency and severity, and, in turn, are making recovery efforts by businesses more difficult. Canada’s four distinct seasons each have the potential to disrupt business operations if the conditions are right (or wrong, depending on your perspective). In some cases, traditional insurance policies can fall short in addressing the fallout from these events.
Aviva’s Parametric Solution provides a unique way to help with recovery efforts from adverse weather events. It can assist in filling gaps that may exist in a standard property policy.
Servicing key weather-impacted industries Aviva’s Parametric Solution can help alleviate the negative economic impacts of extreme weather on businesses with a range of five products:
- Rain Day and Rain Season offer a payout when there is an above average number of rain days or above-average cumulative rain fall, respectively, during a set period.
- Frost Day and Cold Day offer a payout when there is an above average number of frost or cold days, respectively, during a set period.
- Heat Day provides a payout when there is an above average number of heat days during a set period.
This product mix allows for coverage to be purchased for a specific seasonal/adverse weather event versus a blanket annual policy. Aviva’s parametric policies tend to be shorter than traditional policies, with policy periods and ranging from two weeks to five months. Parametric insurance can also help address expenses after an event, improve budgeting, and aid in employee retention depending on the needs and risk of the industry and the size of business operations.
Leveraging historical weather data and live access to satellite/weather stations, Aviva’s Parametric Solution allows clients to insure against unexpected seasonal events. When there is a variance to the chosen benchmark, the weather threshold is triggered, and a claim is initiated.
Coverage can then be tailored to a company’s sales figures or budget, helping mitigate revenue losses caused by an adverse weather event. Policies can be easily quoted in the Parametric Solution platform, removing friction from the process, and saving a client’s time and resources. Payouts are also relatively quick, which can be a real advantage for those businesses managing cashflow.
Currently, Aviva is the only insurer in Canada to offer this parametric add-on solution nationwide. While the existing parametric offering covers precipitation and temperature events, plans are already underway to explore how wind, solar, and/or earthquake events can be folded into the coverage options.
As adverse weather events and their unpredictable nature continue to be a problem for many Canadian businesses, Aviva’s Parametric Solution will be there to help ensure they stay protected.
Want to learn more? Talk to your broker or contact us on gcs.ca@aviva.com for more information.
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Video transcript
Sources:
https://climateinstitute.ca/news/climate-fuelled-disasters-cost-canadians-billions/
https://financialpost.com/news/economy/extreme-weather-profits-canadian-businesses-kpmg
https://climateinstitute.ca/reports/tip-of-the-iceberg/
