Reinsurance company Swiss Re Corporate Solutions is rolling out a new policy unique to Hong Kong.
Typhoon season in Hong Kong is between May and early November, and on a fairly regular basis the typhoon signal No 8 is hoisted.
This means offices must close and staff head for home, usually to play long games of Mahjong, the Stock Market also closes its doors.
In recent years several No 8 signals have been raised when many felt there was no need and no physical damage occurred.
Before The Event
The forced shutdown's have a significant economic cost and can lead to business disruption internationally with the airport also shut-down.
Public safety will always come first of course but now Swiss Re is offering an innovative option for Hong Kong businesses with which firms can get compensation within 30 days upon loss or increasing cost due to typhoon.
Hong Kong Exclusive
Unlike traditional policies requiring insurers to investigate losses after an accident, this time companies would reach an agreement with Swiss Re over the amount of compensation beforehand. Insured companies could claim losses if they can't open for business when a typhoon hits.
Called «Insur8», it is the first-ever typhoon warning insurance product for businesses operating in Hong Kong.
A New Market
This new product indemnifies local businesses against earnings volatility caused by forced shut-downs and additional operating costs stemming from a signal 8 or above typhoon warning issued by the Hong Kong Observatory.
It will be interesting to see if the other major global insurance players, in a highly competitive market, come up with their own offerings in what could become a unique new market.
