Lockton Launches Global Parametric Insurance Practice to Address Emerging Risks and Gaps

Lockton Launches Global Parametric Insurance Practice

Lockton, the largest independent insurance brokerage and consulting group globally, has officially introduced its new global parametric insurance practice. This initiative aims to assist businesses in navigating the growing gaps between insured and uninsured losses by providing economically viable alternatives for risk management.

The company’s parametric insurance offering combines a team of experts specializing in data processing and modeling to create effective and tailored parametric solutions. These solutions focus on helping clients protect themselves against often-overlooked risks that traditional insurance does not adequately cover.

Diego Monsalve, the head of Lockton’s risk management practice for Latin America and the Caribbean, emphasized the company's significant investment in parametric capabilities across various regions, including the United States, Latin America, Europe, and Singapore over the past three years. He stated, "This global team has unique strengths to address risk management issues through innovative approaches, providing top-tier solutions expected from Lockton. We are excited to support our clients as we advance this initiative."

The increasing frequency and severity of natural disasters, such as hurricanes and wildfires, coupled with emerging risks like cyber threats and supply chain disruptions, highlight the urgent need for additional insurance solutions. According to forecasts from Global Market Insights, the parametric insurance market is expected to reach $39.3 billion by 2032. This projection underscores the growing demand for alternative solutions to bridge gaps in traditional commercial property insurance coverage.

Peter Rapciewicz, Executive Vice President and leader of Lockton’s alternative risk solutions practice, pointed out that parametric insurance solutions offer significant advantages for businesses seeking a more effective and economical approach to managing uncertainty. He noted, "Lockton’s investment in this global parametric insurance practice highlights our commitment to delivering sustainable solutions that provide financial protection while allowing businesses to continue operations smoothly amid challenges."

Parametric insurance policies involve payouts triggered by specific event-based criteria, such as storm strength, rainfall levels, or earthquake intensity, regardless of whether physical damage occurs. These policies offer clear transparency and rapid payouts, often processed within a few days following an event. This allows businesses to resume operations with minimal disruption.

Lockton’s parametric insurance practice will guide businesses through a comprehensive risk assessment process. The team will employ data specialists and advanced analytics to identify triggers that enable businesses to manage potential losses effectively. This customized approach serves as a valuable complement to traditional insurance policies, addressing coverage gaps with cost-effective solutions where they are most needed.

About Lockton
Lockton’s independent nature sets it apart in the insurance brokerage and consulting industry. Being a privately held company allows more than 12,600 partners in over 140 countries to focus solely on client risks, insurance, and people’s needs. With extensive expertise globally, Lockton understands what is necessary to achieve outstanding outcomes for its clients. More information can be found at www.lockton.com.