Arbol transacts $11m notional through weather risk platform

Arbol, a provider of marketplace technology that utilises smart contracts, has now sold $11 million notional in weather risk transfer contracts through its platform in the first four months since it began trading live transactions.

Arbol completed an acquisition of well-known specialist provider of weather risk transfer and weather hedging solutions eWeatherRisk back in April, as part of a mission to revolutionise the way weather risk transfer contracts are bought and sold.

That acquisition saw eWeatherRisk President and CEO Brian O’Hearne joining Arbol, bringing his decades of weather risk management market experience to the firm, having headed up the weather business at reinsurance firm Swiss Re and prior to that GuaranteedWeather.

Arbol’s marketplace focuses on parametric or index based protection against weather variation and extremes, aiming to provide fast-paying protection, akin to insurance but without the need for lengthy claims processes.

Around four months in, Arbol’s platform has facilitated almost 200 transactions for a wide range of clients from individual farms to corporations, totaling nearly $11 million in notional weather risk.

“Arbol’s strong traction demonstrates the increasing need for managing weather risk for clients across industries and sizes,” commented Sid Jha, Arbol’s founder and CEO. “One of our unique strengths has been our in-house product design expertise combined with machine learning pricing models to greatly widen access to weather hedging, which is currently restricted to large corporate clients.”

“We expect demand for this platform, which eliminates the need for a human adjustor in the loss assessment process to continue to grow,” explained Philippe Heilberg, Arbol’s CFO and COO. “As our society becomes increasingly contact free as a result of the coronavirus pandemic, there will be growing demand for parametric insurance platforms that offer efficient and effortless coverage that traditional insurers can’t provide.”

Since Arbol launched its platform in late February, the company claims more than 350 institutional clients have signed up for access to its parametric insurance platform.

The company also signed a deal in April that saw parametric and index-based disaster risk transfer specialists Global Parametrics put capacity from its Natural Disaster Fund (NDF) behind a weather insurance pilot for coffee farmers in Costa Rica, powered by Arbol’s technology and smart contract driven marketplace for weather risk transfer.