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Lloyd’s Disaster Risk Facility launches a parametric cyclone insurance product in Northern Australia

22 November 2021

Lloyd’s, the world’s leading marketplace for commercial, corporate and specialty risk solutions, has today launched the first retail parametric cyclone insurance product in Northern Australia.

The new solution, ‘Redicova’ (pronounced ‘ready cover’), is supported by the Lloyd’s Disaster Risk Facility (DRF), an initiative designed to help build resilience by closing vulnerable protection gaps around the world. The new product is led by Beazley with initial reinsurance support from AXA XL, Hiscox and RenaissanceRe who are all members of the DRF at Lloyd’s.

Redicova is a parametric product which provides pay-outs in relation to windspeeds from a severe tropical cyclone. Parametric products make pay-outs based on indices rather than indemnifying the actual loss incurred. Redicova is an autonomous product which will quickly pay claims that are triggered without the need for physical assessment.

The innovative retail solution provides fast financial relief to impacted communities to assist their recovery after natural disasters. Developed around the risks faced by customers in Northern Australia, the severe tropical cyclone product brings the protection gap between economic and insured losses closer together. This will help all citizens in the region including individuals, small to medium businesses and agricultural enterprises.

Redicova uses sophisticated track maps, which follow cyclones and plots their journey when they reach and continue over land. Pay-outs are based on these track maps making use of underlying data from the Australian Bureau of Meteorology. The data is provided in collaboration with Jeremy Benn Pacific, part of JBA Group, a global science and engineering firm, who work on the world’s toughest weather-related problems.

Chris Mackinnon, Lloyd’s Regional Head of Australia & New Zealand, said: “We’re delighted to provide a new solution at a time where both industry and government are working on issues of affordability and availability of insurance in Northern Australia. Redicova will provide fast support for local communities and businesses in Northern Australia who are impacted by severe tropical cyclones.”

Karen Hardy, Redicova Managing Director, said: ‘It’s a privilege to work with Lloyd’s, Tysers, Beazley and others to deliver Redicova to Northern Australia. Redicova will provide fast disaster recovery cash to communities after a severe tropical cyclone, enabling resilience, so they can get on with life.”

Alex Hardy, Head of Property Covers, Beazley said: “Our support for this new parametric cyclone product in Australia demonstrates Beazley’s commitment to providing new and responsive solutions to customers who could be adversely impacted by climate change. The application of data and insurance insight to create an insurance solution that responds quickly and efficiently at the point of a loss is a great example of taking an innovative and client-centric approach to risk mitigation to help support clients at the time when they need us most.”

Enquiries to:

UK: 

+44 (0) 20 7327 5111 | pressoffice@lloyds.com
+44 (0)20 7327 5391 | annie.roberts@lloyds.com
Americas: 
+44 (0)20 7327 5356 | tom.hazzard@lloyds.com  
EMEA: 
+44 (0) 20 7327 5721 | elliot.maule@lloyds.com 
APAC:  
+65 6870 9227 | suganthy.selva@lloyds.com

Notes to Editor

About Lloyd’s
Lloyd’s is the world’s leading insurance and reinsurance marketplace. Through the collective intelligence and risk-sharing expertise of the market’s underwriters and brokers, Lloyd’s helps to create a braver world. 

The Lloyd’s market provides the leadership and insight to anticipate and understand risk, and the knowledge to develop relevant, new and innovative forms of insurance for customers globally. 
It offers the efficiencies of shared resources and services in a marketplace that covers and shares risks from more than 200 territories, in any industry, at any scale. 

And it promises a trusted, enduring partnership built on the confidence that Lloyd’s protects what matters most: helping people, businesses and communities to recover in times of need.

The Future at Lloyd's sets out our strategy to build the most advanced insurance marketplace in the world.

About the Disaster Risk Facility (DRF)
The DRF is an initiative with over $445m of notional capacity designed to help economies, developing or otherwise, close the protection gap through building resilience against natural catastrophes. It is focused on the development and provision of contingent risk financing solutions to mitigate the human and financial impacts of natural hazards and other catastrophic risks. It is backed by seven Lloyd’s syndicates from around the world: AXA XL, Hiscox, Beazley, RenaissanceRe, Chaucer, MS Amlin and Nephila. The group engages with governments, municipalities, and non-governmental organisations, in addition to Lloyd’s usual, valued client base, and supports the Insurance Development Forum (IDF). You can find out more about the DRF here.