A novel insurance product aims to protect cooperatives in the Philippines from insolvency following typhoons. DHI provides online real-time monitoring of weather events all over the country, serving as the basis for the insurer’s payout scheme.
Mina, Pedring, Quiel, Ramon – that’s only those typhoons that have hit the Philippines since August this year. Together, they have affected more than 4.1 million people, left more than 150 dead or missing and caused damages to agriculture and infrastructure in the range of 245.5 million USD (180 mill EUR).
Besides the dramatic personal losses, such natural catastrophes can ruin whole communities and cooperatives in the long run, by destroying their financial base and making reconstruction impossible. An insurance against typhoons can guarantee financial liquidity particularly at times when it is most needed.
Commissioned by Munich Re, one of the world’s leading reinsurers, DHI developed an Insurance Event Trigger for the Philippines. Weather events are monitored and categorized according to their severity, which then defines the payout by the insurance company. Insured cooperatives remain solvent and reconstruction can be financed. Thereby the product, based on DHI’s decisions support technology, benefits both the cooperatives and their members.
Moreover, DHI supplied MunichRe with calculations on the expected annual losses, depending on the frequency of weather events and different payout scenarios. Taking climate change into account, which is likely to increase the frequency and strength of cyclones in the region, this allows for a detailed economic assessment for MunichRe.
Learn more about our product in this Case Story.
Typical typhoon track across the Philippines creating a 20-year event