A claim triggered by Hurricane Beryl has been paid to the Jamaican Co-operative Credit Union League.

The payment was due under a parametric insurance policy first issued in April 2022, and subsequently renewed by Munich Re, providing coverage that protects farmers by allowing them to take a payment holiday in the event that extreme weather, a common cause of debilitating crop damage, impairs their ability to repay micro loans.

Hurricane Beryl passed close to Jamaica in July 2024. Given that the hurricane did not make landfall, event-triggered insurances did not respond due to the binary nature of their radius, windspeed and/or minimum pressure triggers.

Skyline Partners’ FatTrack trigger mechanism, which responds to the dynamic nature of hurricane events, better reflected conditions on the ground. Payout was therefore due under the Howden-brokered coverage.

FatTrack-triggered insurances pay varying proportions of their total limit according to the number of insured location tiles hit by the broad swath of the hurricane (see image), and to the hurricane’s category as it enters the tile. Skyline’s reported FatTrack paths are calculated from data published by NOAA’s National Hurricane Centre.

In the case of Beryl, 45% of the total JCCUL policy value has been paid. The amount reflects the lower, yet still significant, damage caused by the storm’s close proximity to Jamaica. It shows how trigger calibration can create parametric insurance products which are well aligned to incurred losses.

“The insurance product responded exactly as intended,” said co-founder of Skyline, Laurent Sabatié. “The fact that this policy triggered clearly with a partial payment for Beryl in Jamaica is a strong endorsement of FatTrack for everyone involved – the underwriters, the insured lenders, and of course the beneficiaries. While those covered under industry loss warranties and loss-index-driven cat bonds must wait to learn if their coverage will kick in, we have already paid our insureds.”

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