Rainfall Parametric Insurance
Pre-agreed payouts when rainfall exceeds an agreed trigger, for businesses whose losses depend on the rain.
How it works
Parametric insurance: the trigger and the payout are agreed before cover starts.
- Step 01
Event measured
An independent data provider reports daily rainfall at the agreed location throughout the cover period.
- Step 02
Agreed threshold met
The number of rain days, or the cumulative rainfall, exceeds the trigger agreed before cover starts.
- Step 03
Pre-agreed payout
A fixed amount is paid for each additional rain day or excess mm of rain, up to the cover limit.
Rain Day Cover
Payout for excess rain days
A rain day is defined as a day in which the daily rainfall is above the defined rainfall threshold.
If the trigger number of rain days is exceeded, the policyholder will receive a fixed amount for each additional rain day up to the cover limit.
Agriculture (harvest rain), construction (delay penalties), tourism (non-damage business interruption), retail, and other industries where losses depend on the number of rain days.
Example
- Cover period
- July – August
- Rainfall threshold
- 10mm
- Rain day
- Day in which daily rainfall > rainfall threshold
- Trigger
- 3 rain days (RD)
- Payout per rain day
- USD 10,000
- Cover limit
- USD 100,000
During the cover period, the independent data provider reports 8 days in which the daily rainfall is above the 10mm rainfall threshold.
Hover over a day to see it on the chart
| Day | 25 Jul | 30 Jul | 31 Jul | 3 Aug | 10 Aug | 11 Aug | 15 Aug | 30 Aug |
|---|---|---|---|---|---|---|---|---|
| Rainfall (mm) | 11 | 15 | 20 | 12 | 15 | 28 | 19 | 14 |
| Rain day (RD) | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
| Cumulative RD | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Payout(8 cumulative RD – 3 trigger RD) × USD 10,000 per RD = USD 50,000
Rain Season Cover
Payout for excess cumulative rainfall
Cumulative rainfall is defined as the sum of daily rainfall during the cover period.
If the trigger amount of rainfall is exceeded, the policy holder will receive a fixed amount for each excess mm of rain up to the cover limit.
Agriculture (harvest rain), construction (delay penalties), tourism (non-damage business interruption), and other industries where losses depend on the amount of excess rainfall.
Example
- Cover period
- July – August
- Trigger
- > 20mm
- Payout per mm
- USD 10,000
- Cover limit
- USD 200,000
During the cover period, the independent data provider reports 39mm of rainfall.
Hover over a day to see it on the chart
| Day | 25 Jul | 26 Jul | 27 Jul | 3 Aug | 4 Aug | 5 Aug | 6 Aug | 7 Aug |
|---|---|---|---|---|---|---|---|---|
| Rainfall (mm) | 0 | 2 | 0 | 15 | 7 | 13 | 2 | 0 |
| Cumulative rainfall (mm) | 0 | 2 | 2 | 17 | 24 | 37 | 39 | 39 |
Payout(39mm cumulative rainfall – 20mm trigger) × USD 10,000 per mm = USD 190,000
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