Arbol pays $20m parametric reinsurance claims for hurricane Milton, all within 30 days

Arbol, a technology-led underwriter of parametric risk transfer, climate and weather insurance or reinsurance business, has reported that it paid $20 million to clients that saw their parametric reinsurance arrangements triggered by hurricane Milton, with these payouts all made within 30 days of the storm’s landfall.

These parametric reinsurance programs, that protect insurers against named storm risks in Florida, saw their triggers activated and breached when hurricane Milton made landfall near Siesta Key on October 9th 2024, as a Category 3 storm with sustained winds of 120 mph, Arbol explained.

“The immediacy of these parametric payouts fundamentally changes how insurers can respond to catastrophic events,” Deanne Nixon, Senior Reinsurance Adviser, Arbol commented.

“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 offering takes into account client-specific, predefined, objective parameters to determine any payouts due.

Losses are calculated at the client’s policy location level, with resulting payouts under the parametric reinsurance triggers determined by the distance of each insured location from the hurricane track and the maximum sustained wind speeds recorded.

All payouts were available to clients within one month of hurricane Milton’s landfall, demonstrating the efficiency of a parametric reinsurance solution when traditional programs can take months to settle claims.

“Arbol’s rapid response to Hurricane Milton demonstrates why we’re expanding our presence in coastal markets,” explained 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.”

Parametric risk transfer, insurance and reinsurance all demonstrated its effectiveness during hurricane Milton, with numerous claims and payouts made by a range of specialist parametric underwriters and the parametric units of major re/insurers.