Re/insurance broking giant Aon has announced the launch of a new parametric insurance solution that is designed to address and mitigate losses from hurricane-related storm surge along the coast of the United States, developed in partnership with Floodbase, a specialist in parametric flood risk, and global commercial insurer, Swiss Re Corporate Solutions.
A key aspect of this new parametric solution to highlight, is that it utilises a variety of meteorological data sources in order to assess hurricane-related storm surge inundation.Unlike indemnity insurance, which bases payouts on traditionally assessed physical damage, this parametric solution is based on water height, which allows policyholders to choose their desired payout level for a specific storm surge, with rates calculated accordingly.
“The new product can help bridge protection gaps in traditional insurance policies, which may demand high deductibles or include significant exclusions in policy wordings for storm surge risk,” Aon said.
The broker also confirmed that the proceeds can be used for any financial loss related to the event, addressing a considerably broader set of exposures than traditional insurance covers.
For some hurricane events, storm surge damage can account for more than a third of the total loss cost.
Looking back, Hurricane Helene in 2024 generated surges that exceeded 15 feet when it struck Florida’s Big Bend coastal region in September, which was similar to the devastation caused by Hurricane Ian in 2022.
In their 2025 Climate and Catastrophe Insight report, Aon explained that Hurricane Helene was the single most devastating natural catastrophe event of 2024, generating approximately $75 billion in economic losses, primarily due to US inland and coastal flooding.
Additionally, insurers faced around $37.5 billion in claims from Helene and Milton, including payouts from public insurance from the National Flood Insurance Program (NFIP).
Cole Mayer, head of parametric solutions at Aon, commented: “Our data shows that storm surge can be a significant driver of losses for corporates, public entities and (re)insurers alike, so we developed this collaborative parametric solution to help bolster existing levels of cover.
“The solution can function either as a standalone product or in conjunction with traditional and non-traditional insurance policies, to ensure that clients can secure comprehensive protection for their U.S. storm surge exposures. It is part of a suite of Aon product offerings that together are helping to shape better decisions and more comprehensive sources of liquidity for clients.”
Martin Hotz, head parametric natural catastrophe at Swiss Re Corporate Solutions, said: “Parametric insurance provides a fast, flexible and transparent way to cover financial losses caused by natural catastrophes. A substantial part of hurricane-related losses can be the result of storm surge, and with this innovative solution we can better assist corporations in exposed areas with a rapidly-paying cover that fits their individual risk management strategies.”
Annbjørg Medhaug, chief product and strategy officer at Floodbase, added: “The economic losses in the wake of major hurricanes are staggering. The inherent flexibility of this parametric storm surge product provides U.S. coastal corporations with a much-needed solution to address their specific protection gaps.
“Floodbase is delighted to have collaborated with Aon and Swiss Re Corporate Solutions to develop this solution, which demonstrates our continuous commitment to uniting technology and risk capital in order to bring more comprehensive protection to cedents.”
