Swiss Re STORM: Parametric Hurricane Insurance for Mexico
Hurricanes, typhoons, and cyclones – regardless of their name – leave a trail of destruction that can force businesses, public entities, and communities into lengthy recovery periods. Often, those exposed to these events face a multitude of consequential costs, including gaps in traditional insurance coverage or uninsured losses like business interruption and emergency response expenses. Swiss Re Corporate Solutions’ STORM solution aims to address these challenges, offering a complement to traditional insurance or standalone coverage for exposures often excluded or underinsured, potentially accelerating a return to normalcy.
What is Parametric Insurance?
Parametric insurance policies pre-define the amount of a loss. A payout is triggered when a specific event – in this case, wind speed associated with a storm – reaches or exceeds a predetermined level. The STORM product utilizes the maximum sustained wind speed reported at the insured’s locations during a named windstorm.
By using reported wind speeds at insured locations, STORM closely reflects the actual experience of the client during a storm. Within days of a storm making landfall, a high-resolution wind footprint is received from an independent data provider. The maximum sustained wind speed for one minute is identified at the insured locations, and the payout is determined accordingly, allowing policyholders to recover funds for cyclones with significant impact.
Swiss Re Corporate Solutions collaborates with leading global tropical cyclone wind speed data providers, including Moody’s HWind and Reask.
Why Choose STORM?
STORM is presented as a fast, flexible, and transparent insurance solution providing immediate liquidity when it’s needed most. Payments are typically made within 30 days of an event.
Case Study: A hotel operator in Mexico and the Caribbean, highly exposed to storms, faced potential damage to buildings and operational disruptions – including lost revenue from canceled reservations – from a major hurricane. Access to immediate capital is critical for maintaining business continuity. This client transitioned to the STORM parametric solution from Swiss Re Corporate Solutions in 2024, having previously utilized parametric coverage.
The hurricanes Beryl (2024) and Melissa (2025) threatened operations in consecutive seasons. Beryl, the earliest Category 5 hurricane on record in the Atlantic, made landfall in Mexico, with the client’s location experiencing winds near 100 mph. Melissa, the third most intense Atlantic hurricane recorded, impacted the client’s Jamaica location with winds approaching 80 mph. Both events caused widespread disruption and devastation.
Within 48 hours of each event, Moody’s HWind determined that wind speeds at the insured locations met the payout thresholds. Due to the transparent structure and streamlined claims process, parametric payments were received between 5 and 8 business days after each hurricane’s landfall, enabling the client to quickly resume recovery efforts. In another instance, a payout was made in just 3 days. Swiss Re Corporate Solutions Mexico’s parametric policies have also successfully responded to recent events like Hurricanes Erick and John in the Pacific Ocean.
What Clients Are Saying
“When we became aware of the creation of Storm Beryl, we immediately contacted our broker and jointly followed up with Swiss Re on the hurricane’s trajectory, which passed near our first location in the Dominican Republic without major damage and without reaching the contracted radii. We immediately followed up with our second location in Jamaica and fortunately it did not cross the coverage area and passed without damage to our hotel. We continued to monitor the magnitude of the hurricane and its trajectory, finally we were impacted in Cozumel and Playacar Mexico on July 5, 2024. Our experience was very satisfactory with the accompaniment and total transparency of Swiss Re. Finally, we concluded the cycle with the reimbursement in 5 business days, it is worth mentioning that it exceeded all expectations. Thank you very much”
V.G.S. Director of Risk Control
The Palace Company
Frequently Asked Questions
What type of event triggers a payout with STORM?
A payout is triggered when the maximum sustained wind speed, as reported by a data provider, reaches or exceeds a predetermined level at the insured’s location during a named windstorm.
How quickly can a payout be received with STORM?
Payments are typically made within 30 days of an event, but case studies show payouts have been received as quickly as 3 to 8 business days after a hurricane makes landfall.
What kind of losses can STORM cover?
STORM can cover direct and indirect property damage, additional operating expenses, loss of income, or other contingent needs.
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