The parametric insurance market is projected to reach $39.3 billion by 2032, according to Global Market Insights, underscoring the demand for alternative solutions to cover gaps in conventional commercial property insurance
KANSAS CITY: Lockton, the world’s largest independent insurance brokerage and people solutions consulting group, has announced the launch of its new Global Parametric Insurance Practice.
The parametric insurance market is projected to reach $39.3 billion by 2032, according to Global Market Insights, underscoring the demand for alternative solutions to cover gaps in conventional commercial property insurance.
This initiative brings together a team of experts, including data scientists and modelers, dedicated to developing efficient, customized parametric solutions to help clients protect against risks that traditional insurance often overlooks.
“Over the past three years, Lockton has invested significantly in parametric expertise and resources across the U.S., Latin America, Europe, and Singapore,” said Diego Monsalve, Latin America and Caribbean Head of Risk Practices and International Head of Parametric Solutions.
“This global team is uniquely positioned to address our clients’ risk management challenges through innovation, delivering the high-caliber solutions they’ve come to expect from Lockton. We are excited to support our clients as we move forward with this initiative,”he said.
As natural disasters such as hurricanes and wildfires increase in frequency and severity, and as new risks arise, including cyber threats and supply chain disruptions, the need for supplementary insurance solutions is growing.
“Parametric insurance solutions offer significant benefits that can help meet the needs of businesses seeking a more efficient and cost-effective approach to uncertainty,” added Peter Rapciewicz, Executive Vice President and Practice Leader of Alternative Risk Solutions and U.S. Head of Parametric Solutions.
“Lockton’s investment in a Global Parametric Insurance Practice underscores our commitment to delivering resilient solutions that not only provide financial protection but also empower businesses to continue operations seamlessly despite challenges,” said Rapciewicz,
Parametric insurance policies provide payouts based on specific event triggers, such as storm magnitude, rainfall levels, or earthquake intensity in a defined location, which may not necessarily sustain physical damage. These policies offer clear transparency and quick payouts, often processed within days of an event, potentially enabling businesses to resume operations with reduced disruption.
Lockton’s Parametric Insurance Practice, with expertise across multiple regions, will guide businesses through comprehensive risk assessments, leveraging data scientists and advanced analytics to identify triggers that can address potential losses. This tailored approach provides a valuable complement to traditional insurance policies, filling coverage gaps with a cost-effective solution where it’s most needed.