Page 47 - The Insurance Times May 2025

For example, Descartes Underwriting employs remote sens- sents opportunities for innovation, collaboration, and value
ing data to create advanced parametric solutions for cli- creation. InsurTech allows insurers to:
mate-related risks such as wildfire, flood, and typhoon ex- Develop new revenue streams by targeting underserved
posure. markets
Improve underwriting accuracy through data-driven
4. Microinsurance for Vulnerable Communities insights

InsurTech is also expanding access to climate insurance Build brand trust by offering fast, fair, and transparent
through microinsurance platforms. Digital distribution chan-
claims services
nels-like mobile apps and SMS-based platforms-are enabling
Support global sustainability goals by aligning with ESG
rural populations to access affordable coverage.
standards
Companies like Pula in Africa and GramCover in India part-
ner with governments, NGOs, and agribusinesses to deliver
Moreover, as regulators and investors increasingly demand
climate risk protection to smallholder farmers.
climate risk disclosures, InsurTech platforms offer tools for
climate risk reporting, helping businesses align with frame-
5. Real-Time Monitoring and Alerts works like the Task Force on Climate-related Financial Dis-
Some platforms integrate IoT (Internet of Things) devices closures (TCFD).
and climate sensors to monitor environmental variables in
real time. This not only enhances risk detection but also Challenges and Considerations
provides early warning alerts that help prevent losses.
Despite the potential, the adoption of InsurTech in climate
Such technologies are particularly beneficial in sectors like risk management is not without challenges:
agriculture, logistics, and real estate, where timely response Data Quality: Reliable climate and weather data are
to climate events can mitigate damage. essential. Inaccurate data can compromise model ac-
curacy and product design.
Case Study: Arbol's Parametric Climate Scalability: InsurTech solutions must be tailored for lo-
Insurance cal contexts while maintaining scalability.

Arbol, a New York-based InsurTech firm, has pioneered para- Regulatory Hurdles: Insurance regulations must evolve
metric insurance using blockchain and smart contracts. It to accommodate new models like parametric insurance
offers coverage for weather risks like droughts, floods, and and blockchain.
temperature deviations to farmers and businesses worldwide.
Awareness and Trust: End-users, especially in rural ar-
eas, may be skeptical about tech-driven insurance prod-
In one example, Arbol partnered with Indian agribusinesses
ucts.
to provide rainfall-based coverage to farmers. The policy
automatically triggers a payout when rainfall data from Addressing these challenges requires collaboration between
verified weather stations falls below the agreed threshold. InsurTech startups, insurers, governments, and international
This has enabled farmers to receive compensation without development agencies.
filing claims or waiting for lengthy assessments-thereby in-
creasing trust and policy adoption. Conclusion
InsurTech is redefining how the insurance industry ap-
The company's use of blockchain ensures transparency, while
proaches climate risk-shifting from a reactive model to one
smart contracts automate execution, minimizing human
that anticipates, prevents, and adapts to change. By har-
error and operational delays. This model showcases how nessing the power of data, automation, and connectivity,
InsurTech can democratize access to insurance and enhance
InsurTech transforms climate risk from a looming threat into
climate resilience at scale.
a manageable, even insurable, opportunity. As climate risks
escalate, the agility, inclusiveness, and innovation offered
Turning Risk into Opportunity by InsurTech will be vital in building resilient communities,
While climate change poses significant threats, it also pre- sustainable businesses, and a climate-secure future.

The Insurance Times May 2025 43