Marsh launches index-based insurance solution for earthquake, windstorm risks

Marsh has launched an index-based insurance solution for earthquake and windstorm risks for its corporate clients with significant exposures in the United States and Europe.
The instrument is intended for Marsh’s corporate clients that have significant wind and quake exposures, but are unable to purchase adequate levels of insurance. It uses the County Weighted Industry Loss (CWIL) solution.
Unlike other index-based insurance instruments that use total industry or state-wide loss figures to calculate loss payments, the CWIL uses loss data calculated from property claims services broken down to a county level. This enables companies to hedge their earthquake and windstorm risks at a more granular level, allowing for a better match with their actual losses, a Marsh release says.
CWIL was originally developed in 2010 by Guy Carpenter & Company as an index-based reinsurance contract issued by Bermuda-based hedge fund Nephila Capital Ltd.