The Parametric Post - Issue 80
The Parametric Post, the only newsletter dedicated to parametric insurance.
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Thought for the day… more demand, more capacity
Don’t believe the naysayers (and as a reader of this newsletter of course you are not one yourself) but interest in parametric insurance is definitely increasing. We ran our Exponential Risk event this week in London, sold out at 360 people and over 60% of whom are insurers and brokers using catastrophe models. One of the highlights of the conference, based on the feedback we are receiving and the full capacity in the room, was our breakout session introducing parametric insurance to those that may not be directly involved. Some of the smaller start-ups offering parametric insurance have struggled, particularly those outside of the traditional catastrophe (hurricane) and attritional loss (severe convective some) areas ?- although Safehub and Liberty are proving that earthquake can be packaged as a parametric product too. But anecdotal feedback from walking the room this week is that the large brokers are seeing increasing demand for parametric solutions, the traditional insurers in this space (Munich Re, Swiss Re, Generali, AXA and others) are offering more capacity and the longer standing scale-ups such as Descartes are also continuing to grow.?
In the news...
South America ? Agriculture ? Climate
In Ecuador, the InsuResilience Solutions Fund, along with partners including Guy Carpenter Mexico and AXA Climate, has launched the country's first parametric insurance for maize and rice smallholder farmers, aiming to provide accessible coverage against climate risks. Simultaneously in Colombia, the fund is supporting the expansion of a loan-linked agricultural parametric product in collaboration with Raincoat and Munich Re, offered through the Agriculture Bank of Colombia to safeguard farmers from extreme weather impacts while promoting educational initiatives on climate insurance benefits.
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NormanMax to acquire FloodFlash
Flood
NormanMax Insurance Holdings, Inc. is set to acquire FloodFlash, subject to Financial Conduct Authority approval. Post-acquisition, FloodFlash will operate as a managing general agent and Lloyd’s coverholder, continuing to offer its parametric flood insurance products in the UK, US and other markets. This move aligns with NormanMax’s strategy to expand its parametric insurance offerings.
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Blue Marble introduces climate risk initiatives
Drought ? Agriculture ? Hurricane
Blue Marble has introduced the Cocoa Insurance Program in Central Sulawesi to provide parametric insurance for cocoa farmers, ensuring protection against climate-related losses. This initiative is supported by partners such as GIZ Indonesia and Zurich Indonesia. Additionally, Blue Marble has established the Impact Reinsurance Facility, aimed at expanding climate insurance globally. This facility, backed by Zurich Insurance, focuses on underserved communities and offers parametric protection against risks such as drought and hurricanes in regions including Latin America, Africa and Asia.
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Adaptive Insurance completes $5 million seed funding round
US ? Climate
Adaptive Insurance has raised $5 million USD in seed funding led by Congruent Ventures with participation from Montauk Climate, Generation Space and private investors. This funding will facilitate the national rollout of its parametric insurance products, starting with GridProtect, which targets businesses impacted by short-duration power outages. Founded in 2024, the company is planning to expand its offerings by the end of the year to include a variety of parametric insurance products designed to mitigate climate and weather-related risks.
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Global Parametrics and Willis implement solution for coffee farmers
Vietnam ? Agriculture ? Rainfall
Global Parametrics and Willis have introduced a parametric insurance solution for coffee farmers in Vietnam, aimed at providing financial relief for losses associated with low rainfall during the growing season. The Coffee Climate Protection Insurance (CCPI) programme, created in partnership with Bao Minh Insurance Corporation and additional stakeholders, uses satellite data to trigger payouts when rainfall levels drop below predefined thresholds. This method facilitates financial support without traditional claims processes, supporting the stability of farmers facing climate-related challenges. The program is part of the wider "De-Risk South-East Asia" initiative, designed to address weather-related risks in the region’s agricultural sectors.
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WRMS and WFP parametric insurance pilots in Iraq
领英推荐
Iraq ? Agriculture, ? Weather
Weather Risk Management Services (WRMS) and the United Nations World Food Programme (WFP) have initiated Iraq's first parametric insurance pilot schemes. These schemes are designed to protect smallholder farmers and micro-entrepreneurs from climate-related risks, offering specific programmes for drought and heatwave insurance in districts such as al-Hamdaniya and al-Mosul. The policies, underwritten by the National Insurance Company of Iraq, leverage weather data to facilitate automatic payouts. .
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Coverage for migrant workers by Digit Insurance and KMD
India ? Pollution
Digit Insurance has partnered with K.M. Dastur Reinsurance Brokers (KMD) to launch a parametric insurance policy for migrant workers in the Delhi NCR region, designed to provide financial support during construction bans triggered by high air pollution levels. This policy, one of India’s first to utilise the Air Quality Index (AQI) as a parameter, will compensate workers when the daily AQI exceeds 400, affecting their ability to work. The policy covers 6,200 migrant workers, offering up to 6,000 Rs in compensation per claim, with payouts automatically triggered under specific AQI conditions.
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Parametrix introduces parametric performance guarantee
Business interruption
Parametrix has introduced a parametric performance guarantee designed to ensure the contractual performance of large enterprises, offering an alternative to traditional performance assurance. This solution, underwritten at Lloyd's of London, automates payouts when system interruptions occur, supporting the compensation process for unmet uptime commitments or financial losses due to service disruptions. The guarantee offers coverage limits from $2 million to $75 million USD and includes customisable benchmarks to meet operational needs..
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Typhoon insurance for aquaculture by Kairos and CHAZ
China ? Typhoon
Kairos Risk Solutions and CHAZ Insurance Brokers have developed a parametric typhoon insurance solution for an offshore aquaculture company in the South China Sea region. This partnership between the Singapore-based consultancy and the Thailand-based broker provides coverage for typhoon-related yield losses. The insurance activates for Category 2 to 5 typhoons under a "cat-in-a-box" structure, which pays out when a typhoon of sufficient severity enters a predefined geographic area. This coverage is designed to address the specific risk exposures of the client's operations across two locations.
Funding and Acquisition...
Adaptive Insurance completes $5 million seed funding round
Africa ? Drought ? Agriculture
Adaptive Insurance has raised $5 million USD in seed funding led by Congruent Ventures with participation from Montauk Climate, Generation Space and private investors. This funding will facilitate the national rollout of its parametric insurance products, starting with GridProtect, which targets businesses impacted by short-duration power outages. Founded in 2024, the company is planning to expand its offerings by the end of the year to include a variety of parametric insurance products designed to mitigate climate and weather-related risks.
Future opportunities?
Do you represent an organisation looking for parametric insurance? The Parametric Post reaches parametric specialists across the global (re)insurance market. Contact us out at [email protected] to discuss how we can help you list your requirements.
Please note:
We are not a broker or professional advisor. InsTech, in partnership with ParaRisk (a joint initiative by 20 Twenty Search and Cerchia), makes paid introductions across the parametric insurance market, including brokers, (re)insurers, MGAs and data providers, to help facilitate transactions and grow the market for everyone.
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