Swiss Re unveils parametric haze solution in Singapore
Swiss Re’s commercial insurance unit Swiss Re Corporate Solutions has launched a standalone parametric-based haze insurance solution for businesses operating in Singapore.
Numerous severe haze outbreaks have struck Southeast Asia over the past two decades, largely due to the burning of peat forests in the region. According to the reinsurer, the total economic losses from the past two significant haze events in Singapore is estimated at nearly $1.3 billion.
HazeShield has been designed to protect companies from a potential loss of income and reduced trade in the event of a haze incident.
Swiss Re said the new solution is based on a parametric trigger, meaning that pay-out amounts are pre-agreed and matched to specific customer needs and requirements. The trigger for pay-outs is based on Singapore's National Environment Agency (NEA) Pollutant Standard Index (PSI) levels rather than loss or damage to physical assets. Unlike traditional insurance covers, HazeShield does not require loss investigations or adjustments and can be provided for two scenarios: a prolonged or extreme PSI level.
"The financial consequences of a haze event can be severe, especially when businesses need to suspend operations or close," said Didier Bélot, head Southeast Asia at Swiss Re Corporate Solutions. "Up until now, conventional property insurance did not cover the financial losses resulting from a haze event. We designed HazeShield to bridge this gap, address a local issue and provide an extra layer of resilience."
Andre Martin, head of innovative risk solutions Asia Pacific at Swiss Re Corporate Solutions, said: "In developing the solution with clients, we found that a range of industries, including transportation and tourism, are concerned about the financial impact from a severe haze event. HazeShield complements traditional property insurance policies, giving clients a broader coverage with claims payment certainty and quick access to liquidity."]
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