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With the recent multiple CAT events experienced in Florida, Parametric coverage can be a way to provide peace of mind for the financial health of your captive insurance company. Parametric insurance can be structured to provide coverage for multiple catastrophic events within a specified time frame, making it ideal for 2nd and 3rd event scenarios, such as multiple CAT events, limiting the captives exposure to the first event in a given period. 

Benefits for 2nd and 3rd Events

• Rapid Payouts: After a first catastrophic event, quick access to funds for subsequent events is crucial. Parametric insurance can provide payouts within days or weeks, rather than months
• Predefined Triggers: Each event (2nd, 3rd, etc.) can have its own predefined trigger, allowing for tailored coverage based on the specific risks faced after an initial catastrophe
• Flexibility in Use: The payout can be used for various purposes, including business interruption, increased costs, or expediting recovery efforts after multiple events

Structure for Multiple Events

• Tiered Triggers: The policy can be designed with different thresholds for subsequent events, recognizing that vulnerability may increase after an initial catastrophe.
• Aggregate Protection: Coverage can be structured to provide aggregate protection across multiple events, with payouts adjusted based on the number and severity of occurrences.

Considerations

• Basis Risk: There's still a possibility of mismatch between actual losses and payouts, especially for later events
• Customization: The policy can be tailored to address specific concerns related to multiple catastrophic events in a given period

By incorporating parametric solutions for 2nd and 3rd event catastrophic coverage, captives can enhance their ability to respond quickly and effectively to multiple disasters, providing crucial financial support when it's most needed. Parametric coverage can also provide peace of mind in limiting the total exposure of the captive. C.I. can easily provide parametric coverage options in short order. Submit a risk today and find out how parametric coverage coule be a solution for your business.