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Where Can I Get Parametric Insurance For My Business In Canada?

Where Can I Buy Parametric Insurance For My Business In Canada? - ALIGNED Insurance Brokers

Business Recovery 101 |  How parametric insurance quickly covers extreme weather-related risks in Canada

Frost. Earthquake. Tropical heat wave. Storm surge. Forecasts for extreme weather risks are happening more and more frequently across Canada. Whether you live in Vancouver, Calgary, Toronto, Cambridge, Halifax, St. John’s or somewhere in between, you’ve likely noticed that property damaging weather events are on the rise.

Most Canadian economic sectors either are or will soon be impacted by climate risks. These risks come in many forms and can shut down a business for a day, week, month or more. Weather related storm damage isn’t just happening in Canada, it’s happening around the world.

Why extreme weather-related risks are “the perfect storm” to disrupt supply chain management

Weather related risks don’t strike just one industry or business. They strike entire communities and geographic areas at once. For example, freezing rain created slick road conditions on Highway 401. A semi-truck flipped and spilled a load of hot tar across the highway. A section of the 401 was shut down for nearly a day, disrupting a critical transportation link between Toronto and Montréal. Global News notes, “Police say the driver of the tractor-trailer was driving faster than she should have been for the weather conditions. The tractor-trailer hit the concrete median that splits the eastbound and westbound lanes.”1

Related Matters: Global News: Driver charged after tractor-trailer tar spill on Hwy. 401 near Brighton, Ont.

Just one storm can easily disrupt the complex supply chain that ensures fresh produce and products are delivered to local grocery store shelves. This is why no business in Canada is immune to potential weather-related damage.

Extreme weather takes many forms. Across the country, Canadians are seeing record-breaking weather more frequently. 2019 snowfall in Toronto has already broken a record set eight decades ago. CBC noted that February 27, 2019 was “officially the snowiest Feb. 27 in Toronto since 1938.”2 Regardless of where you live, work or do business, extreme weather risks are a very real concern for every Canadian.

Parametric insurance is now available for Canadian weather-related risks

Essentially, parametric insurance is weather-related risk coverage. It is insurance that is specifically designed to address claims related to extreme weather risk damage. AXA Global Parametrics, an insurance and reinsurance broking company incorporated in France, is now making parametric insurance available to Canadian businesses.

Related Matters: Insurance Bureau of Canada: “Study of Impact and the Insurance and Economic Cost of a Major Earthquake in British Columbia and Ontario/Québec”

Specifically, AXA Global Parametrics uses “technology to transfer your climate risk. AXA Global Parametrics is using satellite imagery, weather station and other data to build your climate resilience, creating customized parametric solutions based on over 40 weather parameters. Some examples include:

  • Agriculture – coverage against low yield due to drought, excess rainfall or cyclones
  • Food and Drink – coverage against decreased sales of cold drinks during a cool, rainy summer
  • Construction – coverage against work delay costs due to extreme cold temperatures
  • Retail – coverage against drop in seasonal clothing sales (winter coats, bathing suits…) due to adverse weather
  • Renewable Energy – coverage against a decrease in renewable energy production due to adverse weather (lack of wind or solar radiation)
  • Gas and Energy – coverage against a decrease in energy demand due to a warm winter
  • Tourism and Leisure – coverage against a drop-in visitor numbers and subsequent lower food and beverage sales in theme parks due to extreme weather conditions (excess rainfall, cyclones…)
  • Transportation – coverage against increased costs for airline companies due to cold temperatures and snow (aircraft de-icing)”3

As Canadian commercial insurance brokers, we at ALIGNED are constantly seeking new coverage solutions for businesses. With weather related risks happening more frequently, new and innovative insurance products that respond to extreme weather events are on our radar. At ALIGNED Insurance, we are proud to deliver a better and different insurance experience to Canadian business.

Step by step | How to recover from an extreme weather-related event

Related Matters: Insurance Business Canada: “Lessons learned from the latest Canada flooding”

Business leaders see value in getting commercial insurance for weather related risks in place across Canada. This is because after a weather-related event damages a business property, it will be important to quickly activate recovery activities such as:

  • Reporting your claim to activate the recovery process
  • Immediately contacting your employees, business partners and suppliers
  • Depending on how extreme the weather-related damage to your business is, bringing in experts to activate crisis and disaster recovery plans
  • Responding to public concerns and complaints. If the public views your response to the extreme weather event insufficient, slow or inappropriate, you may need to hire experts to activate a public relations campaign.
  • Dipping into business resources to finance post event recovery activities

These are just some of the reasons why comprehensive and seamless coverage for weather related risks is so important for Canadian commercial operations.

How does parametric insurance for weather related risks work?

Existing and ongoing extreme weather risk research is used to establish probability parameters for parametric insurance. Known parameters are used to benchmark general norms for geographic areas. Parameters can include temperature, rainfall, windspeed, crop yield as well as earthquake magnitude.

Insight: An extreme weather risk situation generally means a change in temperature or rainfall amount that is either above or below a certain parameter.

AXA Global Parametrics designed parametrics insurance to specifically measure extreme weather risk exposures. This new form of insurance coverage is designed to deliver when you need it most, after an extreme weather risk event damages your business property. Here’s how it responds:

  1. When climate events are outside of certain levels, parametric insurance is specifically designed to expedite claims payments quickly and transparently.
  2. When a parameter is below or above a set, level, you will receive a claims payment within a few days for a pre-defined amount and threshold.4

Canadian business properties are being damaged by extreme weather risks. Commercial business can get insurance for extreme weather-related risks. An ALIGNED Insurance broker can help you get parametric insurance for your business in Canada. We can also help you manage business risks across Canada. Talk to us to get your business aligned with parametric insurance options today.

Connect with one of our Canadian Business Insurance Brokers today at 1-866-287-0448 or CLICK HERE!

Get your insurance aligned. Looking for Canadian business insurance that’s ALIGNED with your bottom line? We can help. 365. Call us toll-free at 1-866-287-0448.

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Source(s): 1Global News: Driver charged after tractor-trailer tar spill on Hwy. 401 near Brighton, Ont.;
2
CBC News: Matters: Record-breaking snowfall buries Toronto in white; 3,4 AXA Global Parametrics: Parametric Insurance – Innovation strengthening climate resilienceInsurance Business Canada: “Lessons learned from the latest Canada flooding”; Insurance Bureau of Canada: “Study of Impact and the Insurance and Economic Cost of a Major Earthquake in British Columbia and Ontario/Québec”

Read more about extreme weather events, commercial insurance and related business coverages

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