InsTech Parametric Report; Top 150 Companies To Watch

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A new report, ‘Parametric Insurance in 2022: the 150+ companies to watch’, by InsTech, has found that the parametric insurance market, which helps protect those impacted by measurable events such as storms, could now be worth as much as $1 billion in Gross Written Premiums.

InsTech surveyed 155 market participants working in parametric insurance and found that more than half were seeing 15%, or more, year-on-year growth.

The first half of 2022 saw $250 million of investment in parametric insurance-focused companies, already more than any other year. 2021 saw $116 million of investment, more than double the $43 million of 2020. The largest funding round to date for a parametric insurance focused company has been Descartes Underwriting with a $120 million Series B round in January 2022 that valued the firm, post-money, at $714 million.*

The most prominent use of parametric insurance has been to protect companies and the public sector against windstorms, earthquakes and drought. The InsTech report highlights Skyline Partners, Howden and Munich Re who have developed a parametric policy protecting farmers in Jamaica against hurricane risk. In June, the African Risk Capacity paid $19.7 million  to Zambia and Malawi after droughts triggered their parametric policies.

Parametric solutions for flood, wildfire and hail risk have become more prominent in the last two years. ICEYE, which uses synthetic aperture radar satellites to estimate flood depth, is providing data to trigger parametric pay-outs from Descartes Underwriting and others. Earlier stage parametric solutions protect businesses against losses caused by cyber downtime, terrorism and pandemics.

The report also highlights where blockchain technology is being used for parametric insurance, such as Arbol’s parametric weather solutions which use smart contracts. The report includes a case study from blockchain oracle provider Chainlink.

Henry Gale, Research Analyst at InsTech said, “Advancements in data and technology are improving existing parametric insurance solutions and enabling new solutions to be offered. We are seeing a continuing stream of new entrants into the parametric insurance market being supported by early-stage investors. Meanwhile, the average funding per investment round is also increasing, driven by larger, later-stage rounds from earlier entrants which are now scaling up.”

About alastair walker 9024 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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