HDI and Descartes authorised to offer parametric quake cover to Japanese corporations

(The Insurer) - HDI Global's Japan branch has received regulatory authorisation to offer parametric earthquake covers structured by Descartes Underwriting to Japanese corporations, the companies said, in a move set to open up the local parametric market.

The coverage will trigger claims based on the Japan Meteorological Agency's Shindo seismic intensity scale. It covers earthquake losses including property damage, direct and contingent business interruption and both tangible and intangible losses.

HDI Enablers, HDI Global's risk finance division, worked with parametric specialist Descartes to develop the product.

Regulatory barriers have until now limited insurers' ability to offer parametric coverage in Japan. Market sources previously told Parametric Insurer they knew of only one insurer authorised to underwrite parametric earthquake covers for Japanese corporations. As a result, that company has dominated the market for years.

This move is therefore set to bring greater competition and availability of parametric coverage to a market with significant earthquake exposure.

Dirk Hoering, member of HDI Global's executive board responsible for property, engineering and marine insurance, said: "The Japanese insurance market landscape is in the middle of a structural change. Regulatory bodies are fostering heightened competition amongst major local insurers and encouraging the introduction of new insurance solutions to further improve customer protection."

Descartes' chief operating officer Violaine Raybaud said Generali Global Corporate & Commercial, which has a strategic relationship with Descartes on parametric natural catastrophe and weather covers, would be a key reinsurer of the new product.