Sensible Weather has announced that it is currently developing a parametric product to cover travel disruption due to extreme heat. The company, founded in 2019, already offers similar weather-related coverage for travel disruption caused by other undesirable weather events, such as intense rain.
Nick Cavanaugh, Sensible Weather’s founder and Chief Executive, told the UK’s i newspaper: “We will soon be offering trip protection against extreme temperatures. We’ve found that travellers have different expectations for what’s ‘too hot’, depending on where and when they are going somewhere. So, as we roll the product out, we will modify our offering until we find the ‘sweet spot’ for a given customer, location and time of year.”
Cavanaugh added that the company is looking to offer different levels of payout depending on the severity of the heat. He explained: “We often structure tiered coverages for rain, which could and should apply to temperatures as well. For example, 35°C or more could reimburse 50 per cent, and 40°C or more could reimburse 100 per cent. The goal is to build a coverage that maximises value to the consumer while maintaining an affordable price and enabling us to cover our financial risk exposure.”
The announcement follows intense heatwaves in southern Europe which have seen temperatures reach 40°C and above in some areas. World Nomads recently warned travellers visiting the region that in the majority of cases, most insurance policies will not reimburse losses if a trip is cancelled due to intense heat – at least until a formal government advisory has been published.
Sensible Weather announced that it had formed its first strategic hospitality partnership, with New York City’s Renwick Hotel, earlier this year.