Aon, a global leader in professional services, has teamed up with parametric flood expert Floodbase and Swiss Re Corporate Solutions to introduce a new parametric insurance solution aimed at mitigating the financial risks of storm surges caused by hurricanes along the U.S. coast. This innovative product is designed to fill the protection gaps often left by traditional insurance policies, which may include high deductibles or exclude coverage for storm surge damage.
The solution uses a range of meteorological data to assess the severity of hurricane-related storm surges, offering a more flexible alternative to traditional indemnity insurance. Unlike indemnity policies, which base payouts on physical damage, the parametric solution triggers payments based on water height levels, allowing policyholders to select the desired payout amount for specific storm surge events.
Understanding the impact of storm surge on U.S. coastal businesses
Storm surge, the rise in seawater level caused by hurricanes, can account for over a third of the total loss in somecases. Aon’s 2025 Climate and Catastrophe Insight Report notes that Hurricane Helene, which caused around $75 billion in economic losses in 2024, was the most destructive natural catastrophe of the year. A significant portion of this loss was attributed to storm surge damage.
According to Cole Mayer, head of parametric solutions at Aon, “Storm surge can be a major driver of losses for businesses and insurers, so this solution was developed to enhance existing coverage.” The new product can be used independently or alongside traditional policies, offering more comprehensive protection for U.S. storm surge risks.
Faster payouts and enhanced protection for U.S. coastal corporations
Martin Hotz, head of parametric natural catastrophe at Swiss Re, also highlighted the speed and flexibility of parametric insurance in responding to natural catastrophes. The product promises faster payouts, helping corporations in vulnerable areas recover more quickly.
This collaboration is a step forward in addressing the financial challenges posed by increasingly frequent and severe hurricanes, ensuring businesses are better protected against storm surge-related losses.
