Arbol, a global climate risk solutions platform, today announced the execution of nearly $20 million in payouts for parametric reinsurance programs triggered by Hurricane Milton in Florida. The payouts were available within one month of Milton's devastating landfall, demonstrating the efficiency of parametric solutions in providing rapid financial relief following catastrophic events.
The parametric reinsurance programs, designed to protect insurers against named storm risks in Florida, were triggered when Hurricane Milton made landfall near Siesta Key on October 9, 2024, as a Category 3 storm with sustained winds of 120 mph.
"The immediacy of these parametric payouts fundamentally changes how insurers can respond to catastrophic events," said Deanne Nixon, Senior Reinsurance Adviser, Arbol. "While the industry grapples with processing hundreds of thousands of claims from Hurricane Milton, our parametric programs have already delivered critical financial support to insurers, enabling them to better serve their policyholders during this essential recovery window."
Arbol's parametric reinsurance solution determines payouts based on client-specific, predefined, objective parameters. The program calculates losses at the client’s policy location level, with payouts determined by the distance of each insured location from the hurricane track and the maximum sustained wind speeds recorded.
Current estimates indicate Hurricane Milton could result in more than $15 billion in insured losses across Florida, with insurers reporting nearly 300,000 claims. While traditional reinsurance claims processing for this scale of disaster typically extends over many months, Arbol's parametric reinsurance solutions enable rapid, efficient settlement based on objective data triggers.
Arbol's parametric reinsurance solutions continue to demonstrate their value in providing essential financial protection for insurers operating in regions with significant hurricane exposure. Leveraging advanced technology, objective data, and the client portfolio, these programs help ensure long-term financial resilience for insurers facing increasing climate-related risks.
This latest demonstration of Arbol's efficient parametric solutions follows the company's strategic expansion in coastal insurance markets. In April 2024, Arbol launched Lilypad Insurance, also acquiring Centauri Specialty Insurance Company and Centauri National Insurance Company to strengthen its presence in catastrophe-prone coastal regions. The establishment of Lilypad Insurance and the Centauri acquisition represents a significant step toward addressing the growing coverage gap in coastal communities, combining traditional insurance capabilities with innovative parametric solutions.
"Arbol's rapid response to Hurricane Milton demonstrates why we're expanding our presence in coastal markets," said Sid Jha, Founder and CEO, Arbol. "As traditional insurers and reinsurers continue to withdraw from climate-vulnerable regions and increase attachment points, our combination of parametric solutions and strategic initiatives like Lilypad Insurance offers a sustainable path forward for maintaining vital coverage in these communities."
About Arbol
Arbol is redefining climate risk management to transform it into a globally recognized asset class. Through a foundation of innovative pricing, comprehensive data infrastructure, and precise AI-powered underwriting tools, Arbol aims to bridge the global coverage gap and offer practical solutions for managing climate risks. Awarded for its underwriting innovation, Arbol leverages advanced technologies to serve a broad client base, emphasizing sustainability and resilience in an unpredictable climate landscape.
