Rapid and transparent payment policies prove game-changing in a tough market

“In Latin America, there’s a significant protection gap that leaves vulnerable populations exposed to climate-related risks like hurricanes, droughts and earthquakes.

“Traditional insurance solutions have struggled to provide adequate coverage,” said Raul Revilla Bernal, commercial director for Lat-Am at Descartes Underwriting, “but with our technology and data-driven approach, we aim to change that.”

Descartes Underwriting is poised to bring innovative parametric insurance solutions to the continent, with a new office in Mexico and expanded operations across the region.

“At Descartes, we are three companies in one: an insurance company, a climate company and a technology company,” Bernal said.

“We leverage advanced data analytics, satellite imagery, Internet of Things, artificial intelligence and machine learning to customise products for every client and every peril, regardless of geography,” he continued.

For hurricanes, Descartes uses wind speed triggers; for droughts, precipitation indices or soil moisture levels; and for earthquakes, seismic intensity metrics.

“These tailored indexes facilitate fast, transparent payouts that are aligned with our clients’ needs,” he explained.

“There’s no small print, no ambiguity. If the parameter is triggered, the client gets paid.” 

This precision and transparency are crucial in a region where traditional insurance has often fallen short; Bernal pointed out that in North America, the average time for a claim to be paid was around 550 days.

“We tend to pay within days or, at most, two weeks. That speed makes a critical difference,” he said.

“There’s no small print, no ambiguity...parametric insurance is transparent”

Leaning into local cultural intelligence

For Bernal, working closely with the local community is crucial to address the unique challenges of Latin America. 

“The region’s diversity means we need cultural intelligence; business practices, regulatory frameworks and socio-economic factors vary widely. 

“That’s why we collaborate with brokers, local entities and governments to ensure our solutions are effective and relevant,” he said.

Education is another cornerstone of Descartes’ approach, as Bernal explained: “We’re not just providing insurance; we’re increasing awareness and educating people about climate resilience and parametric insurance.

“We offer tools to brokers, hold workshops and attend events to demystify our solutions,” said Bernal, adding how this approach created a snowball effect of growing awareness and adoption.

Latin America’s protection gap is a persistent issue, but Bernal is confident parametric insurance can help bridge it.

“Our solutions are affordable and accessible, covering risks that traditional insurance often excludes.

“Parametric insurance is transparent. There’s no interpretation risk or hidden clauses- – clients know exactly what to expect,” he stated.

Describing the broader impact of Descartes’ work, Bernal highlighted collaboration with governments, NGOs and financial institutions.

“Through our models, we can access data very easily and offer security to remote areas that are not well served by a country’s central government, helping to build a stronger country and reduce the difference in social classes.”

Small-scale farmers with “only a few cows or hectares of crops” are among those who benefit most. 

“Traditional insurance often overlooks them, but our parametric solutions can group them together, providing the first step toward financial inclusion and other opportunities that can transform lives,” Bernal explained. 

Using science to close the gap

“We’re a science-driven company. Throughout history, major scientific breakthroughs have gone hand-in-hand with technological advancements,” said Bernal.

“That’s what we’re doing now: we want to transform the insurance industry landscape with technology.”

Indeed, Descartes’ in-house team of top scientists and PhDs spend their days developing cutting-edge models to assess risks with unprecedented accuracy.

“For regions without weather stations, we can use satellite data and advanced algorithms to gather information. This eliminates the need for on-the-ground monitoring and ensures efficiency,” Bernal explained.

Looking ahead, Descartes aims to be a leader in climate resilience and sustainability in Latin America. “Our goal is to increase climate resilience in every country in the region while promoting sustainable development. 

“We’re leveraging our experience in other parts of the world to bring tested solutions to Latin America quickly and effectively,” Bernal said.

“We aim to be a breakthrough company developing new products, helping farmers and governments to embrace insurance,” he added.

Bernal strongly believes that sectors such as renewables, tourism, infrastructure, and carbon credits offer significant growth opportunities. 

“The renewable sector, in particular, is heavily reliant on weather. Our solutions can mitigate disruptions, ensuring stability and growth,” Bernal said, noting the reputation of parametric insurance. 

“When businesses have parametric insurance, it strengthens their case with lenders and investors, often securing better financing terms,” he explained.

As Descartes Underwriting expands its footprint in Latin America, the company’s commitment to closing the protection gap through fast and transparent parametric insurance remains at the forefront.

“Our mission is to protect vulnerable populations, foster sustainable development, and transform the insurance landscape with innovative, data-driven solutions,” Bernal said.

"Parametric insurance is bridging the protection gap by offering quick and cost-effective payouts, largely due to its simplicity and ease of understanding for everyone," he concluded.

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