Chaucer has partnered with parametric insurtech start-up Yokahu to launch a microinsurance product to provide cover for at-risk island communities in the Caribbean against hurricane risk.

Hurricane

The product will provide payouts via a dedicated app should wind pressure reach a certain level. 

The product uses central pressure as measurement for the policy as this more closely correlates with the economic impact of an event. 

Should atmospheric pressure reach pre-agreed limits, payments will be issued to policyholders within 10 days of impact. 

Yokahu, which announced its launch last month, is an approved coverholder at Lloyd’s and is set to launch in four jurisdictions – Jamaica, US Virgin Islands, the Bahamas and St Lucia – during 2021. 

Last month it announced a partnership with McKenzie Insurance Services (MIS) which saw MIS become the sole trigger data provider for Yokahu’s parametric hurricane insurance product.

Tim McCosh, founder and CEO of Yokahu said: “The average cost of hurricane insurance is inaccessible to most people, with traditional hurricane insurance products requiring people to pay premiums against the value of their homes.

“Our parametric approach means that a claims payout is determined by the severity of the event at hand – and therefore can be triggered automatically. We have arranged these funds to be transferred to the claimant’s mobile phone, so they have easy access to funds when it matters most.” 

McCosh said the product could help improve resilience in some of the areas most impacted by climate change.

Ed Lines, active underwriter of Syndicate 1084 at Chaucer, said: “The Caribbean is one of the most under-insured regions in the world and climate change is only making the problem worse. The reality is that traditional insurance products are simply not an option for many in the region.”

“This product will help to close the insurance gap, giving people greater peace of mind.”