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Parametric MGA to parametric insurer – The Parametric Post Issue 33

The Parametric Post, the only newsletter dedicated to parametric insurance.

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The InsTech perspective… parametric MGA to parametric insurer

Many companies that specialise in parametric insurance are managing general agents (MGAs), organisations licensed to underwrite insurance policies on an insurer’s behalf. InsTech’s report “Parametric Insurance in 2022: the 150+ companies to watch” profiled 54 MGAs, of which 39 were founded in the last five years.

Typically MGAs thrive where insurers want to test out a market before hiring expensive specialists. MGAs can also work with multiple insurers, so they are not limited by the risk appetite of any one insurer. This is particularly applicable to parametric catastrophe insurance since many insurers have limited appetite for natural catastrophe risks.

Several MGA scale-ups outside parametric insurance, such as Zego and Getsafe, have obtained insurance licences to become full-stack insurers. According to an Insurtech UK survey, 57% of its MGA members would like to transition to a full-stack insurer if possible. Insurers retain their underwriting profits, while MGAs only receive commission on each premium sold.

To become an insurer, MGAs must overcome a range of challenges including capital-related issues, the long waiting time for approval and the uncertainty around the process. Some parametric MGAs would also face unique challenges with risk aggregation if building a portfolio as an insurer. Growing parametric insurance company valuations suggest the largest parametric MGAs may soon be able to raise risk capital, though most may decide the MGA business model suits them best.

Earlier this year, PKF sponsored an InsTech event discussing what MGAs should consider before becoming an insurer. To learn more about why companies should or should not make the transition, read our event write-up: From MGA to full-stack insurer: Everything you need to know.

McKenzie Intelligence Services: providing data-driven intelligence

Climate • InsTech interview

In our recent interview, McKenzie Intelligence Services’ (MIS) Rosina Smith and Daniel Grimwood-Bird discuss data sources for catastrophe response, non-traditional perils and parametric insurance. MIS is the sole trigger provider for Yokahu’s parametric hurricane insurance product in the Caribbean, underwritten by Chaucer.

Parametric: where traditional insurers fear to tread

InsTech podcast

InsTech’s Matthew Grant and Henry Gale joined The Voice of Insurance podcast to talk about the growth of the parametric insurance market and share insights from InsTech’s report, “Parametric Insurance in 2022: the 150+ companies to watch”.

In the news…

Singlife uses Arbol platform for parametric rainfall travel cover

Singapore • Travel • Weather

Arbol’s parametric insurance pricing tools and weather data are being used for Singapore-based insurer Singlife with Aviva’s new rainfall protection cover. The cover protects travel insurance customers against their trips being disrupted by heavy rainfall. If travellers experience more than 6.4mm of daily rainfall at their destination city for more than half of their trip duration, they receive a pay-out of up to $150 SGD ($107 USD).

OTT Risk: parametric insurance against social unrest

Europe • Business interruption

OTT Risk’s latest blog post examines the risk of social unrest in Europe. The Gilet Jaunes protests in France between 2018 and 2019 caused €2 billion EUR in revenue losses for businesses, much of which was not covered by insurance. OTT Risk uses economic indices such as credit card transactions and store sales data to create parametric insurance products protecting companies against non-damage business interruption losses caused by any type of event, including social unrest.

Beazley launches online portal for parametric weather insurance

US • Weather

Insurer Beazley’s parametric weather insurance product, Weather Guard, will be sold through an online portal as part of a partnership with MGA Paragon. Weather Guard covers event organisers and other clients against snow, temperature, rainfall, wind and lightning, using data from Weather Decision Technologies (now part of data provider DTN). The portal is intended to make it easier for more brokers to access Weather Guard.

Anansi expands parametric shipping insurance

UK • Cargo • Embedded

UK-based MGA Anansi has launched its full shipping insurance product for e-commerce businesses. The product includes indemnity-based cover for damaged parcels and parametric cover for delayed or lost parcels. Anansi uses parcel tracking data to trigger automated pay-outs in the event of losses or delays. Insurance capacity is provided by Arch Insurance.

Join us at the WRMA parametric conference in Paris

France • Weather

The Weather Risk Management Association (WRMA) is holding a conference in Paris on 28-30 September 2022, titled “Parametric solutions for climate risk management”. You can register for the event on the WRMA website. InsTech’s parametric insurance research analyst Henry Gale is attending the conference. If you’d like to set up a meeting, email [email protected].

Five parametric start-ups selected for Lloyd’s Lab


Parametric insurance MGAs OTT Risk, Innovatrix Capital, Sola, Yokahu and Anansi are among the companies selected for the ninth cohort of the Lloyd’s Lab innovation accelerator programme. InsTech was delighted to be able to support Lloyd’s in identifying potential Lab applications.

African Risk Capacity wrote $30.8m premiums in 2021

Africa • Drought • Cyclone

Multi-country parametric risk pool the African Risk Capacity (ARC) has published its first integrated annual report, for the 2021 policy year. The annual report notes that ARC wrote $30.8 million USD gross written premiums in 2021 across 28 policies, protecting 18.1 million individuals. ARC made fourteen pay-outs in 2021, totalling $59.6 million USD. The report also includes case studies of pay-outs to Burkina Faso, Mauritania, Madagascar and Mali.

Parametric platform Hillridge raises seed funding

Asia-Pacific • Weather

Australia-based Hillridge Technology has raised $2.3 million AUD ($1.6 million USD) in a seed funding round led by Artesian Venture Partners and InterValley Ventures. Hillridge develops parametric weather and catastrophe insurance products, focused on the agriculture sector. It will use the funding to extend its footprint in Australia and New Zealand and expand to Southeast Asia.

REVO-SPAC launches parametric rainfall products

Italy • Weather • Business interruption

Italy-based REVO-SPAC has launched parametric insurance products protecting catering and events companies against business interruption losses caused by rainfall. REVO-SPAC, a special-purpose acquisition company, raised €220 million EUR in its initial public offering according to PitchBook and acquired Italian insurer Elba Assicurazioni in 2021. REVO-SPAC launched its first parametric product, covering outdoor bathing establishments, in July 2022.

Find out what you’ve missed…

Issue 32 – Tornadoes: a peril to watch in parametric insurance

Issue 31 – Protecting supply chains with parametric insurance

Issue 30 – Parametric risk transfer through marketplaces and exchanges


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