Descartes Underwriting has launched a new parametric insurance product to protect US-based utility-scale solar farms from tornado damage, offering up to $70m in coverage.
The product, which is designed for solar farms with a generation capacity exceeding 10MW, uses cutting-edge technology to provide rapid and efficient coverage in the event of a tornado, according to InsurTech Insights.
Developed in response to the increasing risk posed by tornadoes, particularly to solar power infrastructure, it will offer payouts based on the surface area damaged by the tornado.
With the rising frequency and intensity of severe weather events, the insurance industry is focusing on new and more efficient ways to protect assets that are critical to the renewable energy transition.
This parametric insurance policy ensures that solar farm owners are safeguarded against financial loss caused by tornado damage, helping them to maintain continuity in their operations.
Descartes Chief Insurance Officer and Co-Founder Sébastien Piguet said, “Parametric tornado policy indexes are usually based on windspeed estimates. This product, developed by Descartes’ R&D team, reduces the basis risk by leveraging state-of-the-art technology.
“It combines the accuracy of on-site assessment with the parametric benefits of swift, transparent claims payments. It is the next generation of parametric insurance products.”
The parametric tornado insurance product from Descartes leverages satellite imagery and advanced analytics to calculate payouts for solar farms when tornadoes strike. The policy covers a range of losses, including damage to infrastructure and business interruption, and offers a swift payout process.
This insurance policy uses data from the National Oceanic and Atmospheric Administration (NOAA) and satellite imagery to quickly assess damage in the aftermath of a tornado.
Tanguy Touffut, Co-Founder and CEO of Descartes remarked, “Advances in data and computing power allow us to abandon traditional ways of doing insurance. In their place, we continue to develop new solutions that protect society from the effects of climate change. With this new tornado product, we can protect investments in the energy transition from the relentlessly rising number of Severe Convective Storms, which inflict debilitating damage on solar panels.”
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