Parametric insurance is a non-traditional insurance product that offers pre-specified payouts based upon a trigger event, such as wind speed and rainfall measurements, instead of a lengthy claim’s adjustment process. With the advancement of weather data sources and a need for increased automation and efficiency, there has been a renewed interest in parametric insurance exploration using blockchain technology. This use case application aims to simplify the insurer and reinsurer parametric homeowners’ insurance policy process.

Product: dRe Lifecycle Application

Use Case: Homeowners Parametric (re)Insurance

The objective is to explore how both insurers and reinsurers could agree to pay a certain amount upon occurrence of preset triggers within smart contracts. Blockchain can help this process by automating the process by containing the program logic, checking the data oracle, and paying out when conditions are met.

Arbol has built a “Cat in a circle” parametric reinsurance application that aims to simplify the Cedant and reinsurer operational process by leveraging a weather data feed from oracle dClimate. This weather data feed triggers a smart contract based on wind speed and location (zip code) for a specific peril event. Based on the coverage purchased, claim initiation, notifications, and loss calculations are automated, which calculates at the individual policy level and streamlines the payout process based on a reinsurance layer protecting the entire portfolio of the Cedant.

The Arbol application, dRe, is currently live and in production with a Cedant, marking RiskStream’s first production use case/application.

We are delighted to announce that dRe, has been recognized as the "Underwriting Innovation of the Year" by Insurance Insider, in September 2023.

RiskStream & Arbol held an industry-wide summit and demo of dRe in August 2023. Watch a recording of the dRe Summit here.