Parametric Insurance

Lori Ussery, Actuarial Consultant

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Prior SIGMA publications have focused on weather risk mitigation and data available for historical windstorms in the Atlantic:

https://www.sigmaactuary.com/2019/01/07/weather-risk-mitigation-analytical-considerations/

https://www.sigmaactuary.com/downloads/SIGMAWindRisks.pdf

These articles mentioned the use of parametric insurance as a mechanism to mitigate the financial impact of weather-related risk and analytical considerations for quantifying these types of risk. In a recent article published in Captive International, Lori Ussery of SIGMA discusses parametric insurance structures and actuarial analytics available for captives.

https://www.captiveinternational.com/contributed-article/captives-offer-businesses-a-route-into-the-world-of-parametric-insurance

At SIGMA, we continue to see interest in and use of parametric insurance products among our clients, especially related to wind. Some purchase this coverage from the insurance marketplace and rely on analytics to confirm the reasonability of premiums. Others who self-insure or use their captive to cover this type of risk seek actuarial expertise to determine appropriate funding levels. SIGMA actuaries are available to discuss considerations for structuring parametric products and analytics available.

We welcome your feedback by posting a comment or contacting us at support@SIGMAactuary.com.

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