Trigger-based product will provide corporate clients with rapid access to liquidity following earthquakes, including where no physical damage has occurred
Munich Re Specialty has launched a parametric earthquake insurance product for corporate clients in Japan through the Lloyd’s Japan platform.
The trigger-based cover is supported by Munich Re Capital Partners, the group’s alternative risk transfer unit specialising in parametric natural catastrophe solutions.
Munich Re Specialty said the product is intended to provide businesses with access to liquidity following an earthquake, helping to support recovery and operational continuity.
Payments can be made even where an insured has not suffered physical damage, subject to the policy’s terms, conditions and limits.
The cover uses data from Japan’s KiK-net and K-NET seismic monitoring stations and is designed for clients across a broad range of industries.
Munich Re Specialty said Japan experiences around 1,500 noticeable earthquakes each year because of its proximity to tectonic faults.
Significant events can cause operational disruption and interrupt supply chains, creating financial losses that may not be addressed by traditional indemnity-based property insurance.
Stephanie Ogden (pictured), CEO of Munich Re Specialty Global Markets, Syndicate, said: “This parametric structured product meets a real, historic and daily challenge for businesses across Japan.
“Our role is to help businesses continue their routine operational practices in the face of the devastating impacts of natural catastrophes.
“Here, we enhance our purpose by enabling fast claims settlements and harnessing global collaboration, skillsets and knowledge across Munich Re,” she said.
Parametric insurance pays according to a predefined trigger, rather than solely through an assessment of the physical loss suffered by the policyholder.
Munich Re said the structure should give clients greater clarity over how the cover will respond and enable claims to be settled more quickly after an event.
René Mück, global head of parametric nat cat at Munich Re, said: “Japan has a strong appreciation for innovative and effective risk management.
“By combining local market understanding with our global natural catastrophe parametric capabilities, we can help Japanese clients quantify complex exposures and close protection gaps with solutions designed for clarity and speed.
“We look forward to building long-term partnerships that support greater resilience across the Japanese market.”
The product will be distributed through Lloyd’s Japan, providing local market access to Munich Re Specialty’s underwriting and risk capital.
Emma Loynes, CEO of Asia Pacific, Middle East and Africa and country manager of Singapore at Lloyd’s, said: “This is a strong example of Lloyd’s international platform enabling specialist underwriting expertise to reach clients in key markets.
“By combining global risk capital with local access through Lloyd’s Japan, we can help the market respond to client needs with solutions that are innovative, relevant and resilient,” she added.
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