The Parametric Post, the only newsletter dedicated to parametric insurance.
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The InsTech perspective… how we spot parametric insurance trends
At InsTech London, our insights come from regular conversations with our 150 corporate members. For the final Parametric Post edition of 2021, we spoke to some members active in parametric insurance focusing on a potential trend for 2022: hybrid parametric and indemnity insurance products (read more below). If you would like to join the conversation, contact Henry Gale on LinkedIn.
The Parametric Post readership has more than doubled in the last six months. If you joined recently you may have missed some of our great articles and podcasts. We have added a section at the end of this newsletter with a round-up of our best parametric insurance content from the year. We will be back with more parametric insurance news and insights in January 2022.
Best of both: bundling parametric with indemnity insurance
Parametric insurance is often bought as a complement to indemnity insurance, but newly announced hybrid products combining parametric and indemnity insurance in the same policy will launch in 2022. We look at different ways parametric and indemnity insurance can be combined, with perspectives from Vave, Skyline Partners, Descartes Underwriting, Mastercard and Súper.
Near real time hazard data - around us and above us
Flood • InsTech podcast
On 9 November, InsTech London and ICEYE hosted an event discussing how to use near real-time hazard data to speed up claims handling and reduce costs. ICEYE provides insurers with building-level flood depth data, which can be used to power parametric policies. Speakers included parametric MGA Skyline Partners’ Gethin Jones and modeller Fathom’s Andrew Smith. Listen to the highlights on InsTech London podcast episode 167.
In the news...
The Demex Group raises $9m Series A funding
Analytics platform The Demex Group has raised $9 million in a Series A funding led by Anthemis, Blue Bear Capital and QBE Ventures. Demex is focused on parametric insurance for climate-related risks. The company recently partnered with MGA Vave on integrating extreme temperature coverage into Vave’s commercial property insurance policies. Demex’s $4.2 million seed funding round was led by Anthemis and IA Capital in August 2020.
Volcano catastrophe bond listed in Guernsey
Humanitarian aid • Volcano • Catastrophe bond
A catastrophe bond covering volcanic eruption risk has been listed in Guernsey on The International Stock Exchange. The $3 million bond has a parametric trigger based on plume height. It was issued in March 2021 for the Danish Red Cross and brought to market by broker Howden Group Holdings. The bond is designed to distribute funds for humanitarian aid.
Parametric insurance and extreme cold events
Temperature • Agriculture • Supply chain
MGA Descartes Underwriting has released a white paper on using parametric insurance to build resilience against extreme cold events. Descartes identifies agriculture, critical infrastructure, construction and supply chains as the sectors most at risk from extreme weather. Extreme winter weather caused $80-130 million in economic losses in Texas in February 2021. Whilst traditional indemnity insurance often requires physical damage to pay out, parametric insurance can cover losses caused by temperature where there is no physical damage. Descartes Underwriting’s Sébastien Piguet discussed trends in parametric insurance on InsTech London podcast episode 165.
Arbol to provide parametric crop insurance in Cambodia
Cambodia • Agriculture • Blockchain
Parametric platform Arbol has received a grant from blockchain oracle provider Chainlink to create a smart contract-based parametric crop insurance programme in Cambodia. The product will protect Cambodian farmers against weather risk. Farmers represent nearly 20% of Cambodia’s population. The insurance will be sold through agriculture technology platform Agribuddy.
Disaster risk insurance: 5 insights from the Philippines
Philippines • Earthquake • Typhoon
The World Bank helped the government of the Philippines transfer $200 million of earthquake and typhoon risk through parametric insurance to reinsurers in 2017, and the programme was doubled in 2018. Over two years, three pay-outs were made. A World Bank blog post examines the lessons learnt. 74% of the Philippines population is exposed to natural hazards.
In case you missed it...
The InsTech London podcast has hosted several parametric insurance innovators in 2021. You can listen on all good podcast platforms and read the write-ups on our website.
Episode 123: Ben Hubbard: CEO & Co-founder, Parsyl: Cold chains, Covid & parametric insurance
Episode 128: Charles Blanchet: VP of Solutions, ICEYE: Your satellite will be with you shortly: Rapid flood loss assessment
Episode 138: Evan Glassman: Co-founder, New Paradigm Underwriters: Parametric insurance - delivering US hurricane & quake cover since 2013
Episode 139: Henri Winand: Co-founder and CEO, AkinovA: The e-placing platform driving new insurance solutions
Episode 146: Gethin Jones, Skyline Partners & Calum Williams, AEGIS London: The parametric platform delivering new insurance solutions
Episode 165: Sébastien Piguet: Co-founder & Head of Underwriting, Descartes Underwriting: Going global - delivering parametric insurance at scale
You can find our interviews with and profiles of companies working in parametric insurance here, along with our analysis of trends in parametric.
From customer to capacity - Parametric earthquake cover in New Zealand from Bounce Insurance
Cryptocurrency - the next capital pool for parametric insurance?
Wakam's embedded parametric solutions for travel insurance
Building resilience: CCRIF’s $40m post-earthquake pay-out to Haiti
Find out what you've missed...
Issue 15 – Replacing indemnity insurance with parametric
Issue 14 - COP26: the implications for parametric insurance
Issue 13 - A new data source for parametric flood insurance
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