Launching our rainX tool
Drought and flood increasingly affect communities and agriculture across the globe, frequently causing substantial damage and destroying livelihoods. What’s more, in areas where such events are a recurring phenomenon, the need/burden to finance recovery efforts often falls on taxpayers. This reduces purchasing power and slows down economic activity, thus further aggravating the situation.
To offer governments at the national, regional and local level easier access to protection against these risks, we recently developed and launched Swiss Re rainX, an index insurance tool. In contrast to classical indemnity insurance, which requires policyholders to prove the extent of any losses incurred, index insurance relies on external, verifiable and quantifiable data or parameters.
Our rainX tool offers customised protection against two types of risk: heavy rain and subsequent flooding, and lack of rain (also called meteorological droughts). To feed the tool, we use daily rainfall data with a high spatial resolution provided by a number of independent and public satellite sources. The threshold values that trigger a payment are calculated on the basis of historical values as well as forward-looking modelling.
The rainX tool enables us to offer our clients such solutions quickly and effectively, and allows for scalability of coverage and payout patterns.