The product leverages cutting-edge technology, including satellite imagery and advanced analytics, to provide rapid and efficient coverage for solar farms with a generation capacity exceeding 10MW in the United States.
In a statement released by Descartes, the company said: “Payouts are calculated when an identified tornado – even one as weak as the Enhanced Fujita (EF) Scale – enters the mapped surface area of the insured windfarm and causes damage to panels, as identified by very high-resolution satellite imaging. The percentage paid of the pre-agreed limit, up to $70 million, matches the percentage of the surface area damaged.”
The parametric insurance policy covers a range of losses, including damage to infrastructure, business interruption, and other financial impacts resulting from tornadoes.
In the event of a tornado, the policy utilizes data from the National Oceanic and Atmospheric Administration (NOAA) and satellite imagery to quickly assess the extent of damage. For example, if a tornado impacts a solar farm insured for $50 million and satellite images reveal damage to 15% of the solar panels, the insured party would receive a swift payout of $7.5 million within weeks of the event.
This new product demonstrates Descartes Underwriting’s commitment to supporting the renewable energy transition by providing innovative and effective insurance solutions for the growing solar power industry.
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.”
Tanguy Touffut, Co-Founder and CEO of Descartes stated: “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.”
