Beazley introduces innovative tornado crisis insurance

10/09/2023 News

Beazley, the leading speciality insurer, has partnered with Sola Technologies and Spinnaker Insurance Company to provide the first admitted parametric tornado disaster benefit insurance for homeowners. The innovative Tornado Crisis product leverages National Weather Service (NWS) data to automatically initiate a fast and straightforward claims process. 

The new product offers early payments to help policyholders deal with the immediate impact following a tornado. The NWS will confirm the path and severity along the path, based on the EF (Enhanced Fujita) scale of a tornado, which then acts as a trigger for payments to be generated. Sola aims to pay the disaster benefit shortly after the event, compared to the extended time it often takes for traditional policies to pay out. 

The policy limits of up to US$15,000, are intended to cover the deductible and immediate expenses. The coverage can supplement a comprehensive homeowners or renters policy and is currently available in 15 US states in the Midwest and Southeast, with more expected to come online soon. 

Wesley Pergament, CEO of Sola, said: "Our mission is to help people recover faster. We are building the first fully data-driven claims process to protect policyholders from the ever present risk of tornados. Sola is paving the way for a new era of insurance products that bridges the payment gaps and delays that sometimes happen with traditional insurance."

Neil Kempston, Head of Incubation Underwriting at Beazley, commented: "Beazley is well known for its focus on ensuring clients have a seamless and stress free claims process. By applying data and technology, we believe the new Tornado Crisis Insurance product will further improve the situation for policyholders who need a fast claims payment in the aftermath of a tornado. We are pleased to be supporting this innovative new solution which can help policyholders with the immediate challenges following a tornado."

“We are excited to partner with Sola, providing capacity for their novel Tornado Crisis product, and expand our relationship with Beazley,” said Torben Ostergaard, Spinnaker’s President and CEO. “Both companies share Spinnaker’s commitment to innovation and delivering positive client experience.”

Costero Brokers, a Lloyd’s broker and specialist in innovative placements, served as the sole placing broker and was responsible for securing fronting and reinsurance capacity.  James Forbes said: “The Costero team is thrilled for Sola and excited to see how their vision for insurance products that result in rapid, data driven, claim payments changes how the market provides cover for weather and climate risks.”

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