BLANCA BERRUGUETE

Parametric products, developing and utilising new data and indices to accelerate and automate the claims process, have made progress within the insurance industry in the past decade. But they haven’t yet moved the needle decisively, instead seen as peripheral, small limit accompaniments to bigger, slower moving placements of traditional products. What is needed to change that?
For parametric advocates, is the route to success about focusing on proven perils and product experience – such as using plentiful meteorological data to transfer extreme weather property and agricultural risks? Or is it about innovating new data with new perils, prioritising fast-moving emerging risks and intangibles as focuses for growth, requiring deft use of limited historical data, which would make traditional underwriters turn to talk of strict limits or even exclusions?
Parametric is an area rich with examples of product innovation, so there will be exponents for both approaches, and a market broad enough to see different strategies vying for growth.