The Parametric Post, the only newsletter dedicated to parametric insurance.
Thought for the day… expansion of sensor-driven parametric earthquake (re)insurance
We are delighted to see that Liberty Mutual Reinsurance and Safehub are now offering a new parametric earthquake product all around the world, following the success of a pilot programme in Mexico City – and a bit of help from us. A sensor-based solution has already been rolled out for 23 strategic locations in the city to facilitate rapid and accurate payouts to Liberty clients. Unlike other parametric products, which rely on general estimates from public agencies, this sensor-based solution offers increased accuracy in assessing earthquake impacts at the building and therefore reduces the basis risk associated with determining payouts. InsTech has been supporting Safehub in defining this innovative approach to sensors, parametric and insurance.
You can learn more from our report we released on this topic last year and hear more details of the pilot project between Liberty and Safehub in our webinar with the key participants from earlier this year. Over 700 people have watched that proving the growing interest in new areas of parametric.
This week’s parametric opportunities
Are you an insurer, MGA or broker with capacity to deploy for parametric insurance?
We know organisations seeking:
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$20 million of crop insurance in India, May-Dec 2024
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$100 million of insurance for Philippines typhoon, Apr-Dec 2024
Can you offer coverage to any of these organisations? Email [email protected] to learn more.
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.
In the news…
Liberty Mutual Reinsurance partners with Safehub on earthquake insurance
Earthquake • Sensors
Liberty Mutual Reinsurance has announced an exclusive partnership with Safehub to offer a building-specific, sensor-based, parametric earthquake (re)insurance product to companies around the world. Safehub’s seismic sensor technology captures building-specific real-time data at the policyholder’s building location to trigger parametric (re)insurance policies.
CRC Group and Plover Parametrics launch D&O product
D&O • Securities class actions
Wholesale broker CRC, in collaboration with Plover Parametrics, has launched a new Directors and Officers (D&O) insurance product. This is known as Side X and is designed specifically for securities class actions. This parametric product offers up to $2 million USD in coverage. It features no deductible and triggers a payout based on stock price drops and securities class action filings.
Arbol expands into homeowners insurance
US • Climate
Arbol, a parametric specialist firm, has launched Lilypad Insurance, a new subsidiary for the company which is targeting the US homeowners market. Arbol is providing this after entering an agreement to acquire Centauri Insurance from Applied Underwriters. Lilypad Insurance offers homeowners and property insurance in US coastal areas. It will first operate in Louisiana, aiming to address the coverage gaps and provide more resilience for coastal homeowners.
Moody’s RMS collaborates with Augment Risk
Weather • Earthquake • ILS
Moody’s RMS has collaborated with Augment Risk to offer parametric risk transfer solutions in the reinsurance sector. This joint initiative is providing solutions for corporates, Lloyd’s syndicates and Insurance Linked Securities (ILS) funds. It is aiming to offer parametric reinsurance for perils such as windstorms, earthquakes and wildfires. The collaboration brings together risk modelling and basis risk analytics to improve transparency and efficacy in parametric insurance products.
Insights from Miller on expansion in parametric flood insurance
US • Flood
Rowan Minhas from broker Miller highlights significant growth in the parametric insurance market, especially for flood risks. Parametric flood insurance is reaching US states not previously covered and cover is now offered up to $75 million USD per risk. This is possible due to enhancements in satellite monitoring and better data. The increasing sophistication of data sources such as river gauges and coastal sea levels is helping to support the broader adoption of parametric solutions across commercial and industrial sectors.
Hannover Re sponsors $13.75m cloud outage cat bond
US • Cyber • Catastrophe bond
Hannover Re has sponsored a $13.75 million USD catastrophe bond, called Cumulus Re, through its Kaith Re Ltd. subsidiary to cover cloud outage risks. This parametric bond, modelled by Parametrix, is believed to be the first of its kind to cover losses that arise from a sustained cloud outage. It provides Hannover Re with a one-year source of retrocession for significant cloud outages, utilising a parametric trigger based on specific service disruptions in US cloud regions.
World Bank issues $420m cat bond for Mexico
Mexico • Catastrophe bond
The World Bank has issued catastrophe bonds worth $420 million USD to provide the Government of Mexico with disaster risk protection against earthquakes and named storms along the Atlantic coast. These bonds, issued under the International Bank for Reconstruction and Development’s (IBRD) Capital-At-Risk notes programme and intermediated by Munich Re, enhance previous coverage by $60 million USD. It will last for four years.
FloodFlash introduces business interruption coverage in the US
US • Flood • Hurricane
As the 2024 hurricane season nears, parametric flood insurance MGA FloodFlash has launched a new business interruption (BI) product, Flood BI, in response to the predicted active hurricane activity. This product addresses the coverage gap left by the National Flood Insurance Program (NFIP) and private insurers who rarely offer standalone BI coverage. Flood BI, which offers up to $5 million USD in coverage per location with potential increases to $10 million USD, activates based on predetermined water levels detected by FloodFlash’s sensors.
Sensible Weather offers high temperature Weather Guarantee
US • Weather
Sensible Weather, which offers weather protection for travel and outdoor activities, has partnered with Collective Hill Country, an outdoor retreat in Texas, to provide a Weather Guarantee for high temperatures. This offering aims to provide insurance cover for travellers during the hotter months, expanding on Sensible’s existing rain protection service. Guests at Collective Hill Country can now secure a guarantee against extreme heat, receiving payment if temperatures exceed preset thresholds.
Global Shield allocates €10m to enhance climate resilience
Pacific • Climate
The organisation “Global Shield against Climate Risks” is receiving a €10 million EUR contribution from the German Ministry for Economic Cooperation and Development (BMZ), bolstering climate resilience in Pacific Island Countries (PICs). The funding supports the Pacific Catastrophe Risk Insurance Company (PCRIC), enhancing its capacity to provide parametric insurance and ensuring fund access post-disaster.
Jamaica secures $150m cat bond for hurricane protection
Jamaica • Hurricane • Catastrophe bond
Jamaica has re-entered the catastrophe bond market with a $150 million USD issuance aimed at securing parametric named storm and hurricane protection for the next four hurricane seasons. This bond, issued in collaboration with the World Bank under the IBRD’s Capital-At-Risk notes program, follows Jamaica’s initial $185 million cat bond that matured at the end of 2023. The new bond will provide coverage until December 2027, with parametric triggers based on storm location and central pressure.
Find out what you’ve missed…
Issue 68 – Parametric travel insurance goes global
Issue 67 – Diversification opportunities for parametric insurers
Issue 66 – When parametric becomes a perk
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