Posted on 28 Jul 2010
On Tuesday Swiss Reinsurance Co announce that it has entered into an agreement with the Alabama State Insurance Fund, or SIF, to provide the fund with insurance cover in case of a heavy hurricane.
The financial terms of the deal, which is part of Swiss Re's effort to boost public-private partnerships, haven't been disclosed. Swiss Re said potential future payments to SIF could be used for various purposes, including emergency response costs.
"We are pleased to work with Alabama's State Insurance Fund to help them with their risk management," said Swiss Re's Chief Risk Officer Raj Singh. "Until now, governments, and ultimately taxpayers, have been left shouldering the burden of paying for emergency expenses and reconstruction well after the disaster has passed."
Swiss Re, in 2009, helped out Mexico to put in place an insurance agreement that should allow the country to tap funds in the event of a heavy earthquake. Swiss Re was also part of the Caribbean Catastrophe Risk Insurance Facility that helped provide emergency funds to Haiti after the country was hit by a devastating earthquake.
"This transaction marks a milestone for the State of Alabama in identifying and managing key risks," said Ben Spillers, risk manager at Alabama's Department of Finance. "Based simply on the wind speed of a hurricane, we can now receive funds rapidly to cover our immediate costs."
The so-called parametric triggers that are part of the deal between Swiss Re and Alabama haven't been disclosed. Usually, such parametric triggers include peak windspeeds in a predefined area. If a storm surpasses a predefined windspeed, payments are triggered.