The Parametric Post, our quarterly newsletter dedicated to parametric insurance.
Thought for the day… constraint inspires creativity
Two of the key drivers for the success of parametric triggers are the availability and the reliability of the data that defines the index and can be relied upon to activate a trigger. There has for a long time been a tension between using publicly available and free data compared to data that must be licensed. Free data can be turned off at any time, whereas licensed data is typically contractually more reliable and available.
This choice of what to use for the creators and issuers of parametric insurance has become even harder in today’s world. Emerging economies often have fewer options for detailed data and the US, once a source of both reliable and free data is threatening to turn off the taps or at least restrict the flow of data from sources such as USGS.
Fortunately, sources are becoming available, or to borrow from the founder of Twitter/X Jack Dorsey, “constraint inspires creativity”, and new companies are starting to emerge to provide the alternative data solutions… albeit at a price.
Safehub is back in the news, and if you missed or want a refresh on how Safehub is complementing the USGS reporting on earthquakes and working with the non-profit GEM (Global Earthquake Model), then we strongly recommend our webinar on that topic, recorded earlier this year, which is highly informative and a great introduction to this topic.
In the news…
LM Re and Safehub launch ShakeNet Parametric
Earthquake • Sensors
Liberty Mutual Reinsurance and Safehub have launched ShakeNet Parametric, an earthquake parametric insurance solution triggered by regional shaking data. The product combines data from Safehub’s sensor network with existing government seismic networks.
Swiss Re and Munich Re back Generali and CEI solution for Italian churches
Italy • Earthquake • Flood
Generali and Conferenza Episcopale Italiana have partnered to launch a parametric insurance solution protecting parish entities across Italy’s 226 dioceses from natural catastrophes. Swiss Re and Munich Re are providing reinsurance capacity for the programme, which also involves Howden and others.
Miller, SPG Canada and NormanMax launch earthquake cover
Canada • Earthquake
Miller has partnered with Specialty Program Group Canada and NormanMax Syndicate 3939 to facilitate a binder granting SPG Canada full underwriting authority for a parametric earthquake solution across British Columbia.
WTW unveils weather warning policy with Swiss Re
UK • Ireland • Weather
Willis, a business of WTW, has announced a parametric policy in collaboration with Swiss Re Corporate Solutions that is activated when a red weather warning is issued by the UK Met Office or Met Éireann. The solution is triggered by the weather forecast itself rather than the actual weather event or resulting damages, providing coverage for pre-emptive actions.
AXA and MOTOGO partner on typhoon and travel insurance
Asia • Typhoon • Travel
AXA Hong Kong and Macau and MOTOGO have partnered to launch ‘Tropical Cyclone Coverage’ which provides benefit payouts if a Tropical Cyclone Warning Signal No. 9 or above is issued for a specified period. The second product, ‘MOTOGO Care – Guangdong and Macau Travel Insurance’, offers cross-boundary travel protection including medical coverage of up to $300,000 HKD, along with benefits for travel delays, missed events and journey curtailment.
AXA, WTW and partners develop cover for Colombian coral reefs
Colombia • Hurricane • Climate
AXA COLPATRIA, AXA Climate, Fondo Acción and WTW Alternative Risk Transfer have designed a parametric insurance programme to protect coral reefs in the Colombian Archipelago of San Andrés, Providencia and Santa Catalina from hurricane damage.
Gallagher structures pandemic policy with Munich Re
India • Pandemic
Gallagher has structured and placed the solution for the Indian market, with New India Assurance issuing the policy under a Non-Damage Business Interruption package programme. The policy is reinsured by Munich Re’s Epidemic Risk Solutions team and covers loss of revenue and additional expenses arising from outbreak events.
Mitsui Sumitomo rolls out parametric weather insurance product
Japan • Weather
Mitsui Sumitomo Insurance has launched Weather Insurance Index, designed to help insurers manage financial losses caused by severe or unusual weather. The product relies on an index built from key weather data points including temperature, rainfall, wind, snow and sunshine.
SiriusPoint provides capacity for Arden’s US wildfire programme
US • Wildfire • Property
Arden’s Consolidated Fire Insurance Policy includes embedded parametric coverage, initially offered in California with plans to expand into other wildfire-exposed states in the western US.
Arbol launches wildfire product for Western US states
US • Wildfire
The product covers commercial and residential properties in high-risk wildfire regions across the US, with coverage limits up to $10 million USD, initially targeting California, Colorado, Arizona and other Western states.
Vortex launches parametric snow insurance for seasonal risks
US • Snow • Weather
The solution from Vortex Weather Insurance is designed to protect companies against financial loss from excessive or insufficient snowfall. Payouts trigger when specific pre-agreed weather events occur, such as a certain amount of snowfall on a given day or a snowless winter impacting revenue.
ARC issues insurance payouts to Lesotho and Mozambique
Africa • Drought • Tropical cyclone
Lesotho received $2.77 million USD following activation of its sovereign drought insurance policy for the 2024/25 agricultural season. Mozambique received just over $5.4 million USD in combined payouts, with $1.8 million for drought response and $3.5 million for Tropical Cyclone Chido response.
Syria receives $7.9 million USD drought payout
Syria • Drought
A parametric insurance policy has triggered to provide relief to nearly 120,000 people in Syria following one of the country’s worst droughts in half a century. The initiative, funded by Humanity Insured as part of a public-private partnership with the World Food Programme, the Global Shield Financing Facility and support from Allianz, was triggered in June by satellite-monitored rainfall and vegetation data.
Find out what you’ve missed…
Issue 81 – A new lens on weather risk
Issue 80 – More demand, more capacity
Issue 79 – Epicentre of innovation
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