#USA #Kansas City #risk management #parametric insurance #Lockton

Lockton Launches Global Parametric Insurance Initiative

In an exciting development for the insurance landscape, Lockton, the largest independent insurance brokerage group globally, has launched its new Global Parametric Insurance Practice. This innovative approach aims to provide businesses with cost-effective solutions for risk coverage, addressing the widening gap between insured and uninsured losses.

Responding to Growing Risk Gap

As natural disasters such as hurricanes and wildfires become increasingly frequent and severe, along with emerging risks from cyber threats, the need for alternative insurance solutions is urgent. Diego Monsalve, the head of Risk Practices for Latin America and the Caribbean, highlights Lockton's significant investments in parametric expertise and resources across regions, including the USA, Latin America, Europe, and Singapore.

Expertise at Work

The initiative merges a multidisciplinary team of experts, including data scientists and modelers, dedicated to developing customized parametric solutions. By leveraging advanced analytics, Lockton aims to help clients safeguard against risks that traditional insurance often overlooks. Monsalve emphasizes that this global team is uniquely positioned to tackle client risk management challenges through innovative solutions and absolute quality that Lockton is known for.

Market Demand for Parametric Insurance

According to Global Market Insights, the parametric insurance market is projected to reach a staggering $39.3 billion by 2032. This figure underscores the increasing demand for alternative strategies to fill the coverage gaps in conventional commercial property insurance.

Benefits of Parametric Insurance

Parametric insurance solutions offer significant advantages, enabling businesses to find more efficient and cost-effective methods to mitigate uncertainty. As Peter Rapciewicz, Executive Vice President and head of Lockton's alternative risk solutions and parametric solutions in the U.S., points out, the firm’s investment in this practice exemplifies their commitment to providing resilient solutions that offer financial protection while ensuring smooth business operations amid crises.

One of the core features of parametric insurance is its trigger-based payouts. Unlike traditional insurance, where claims can take time to process, parametric insurance provides transparency and expedites payment based on specific triggering events. For instance, payments might be based on criteria like storm intensity, rainfall levels, or earthquake magnitude at predefined locations, allowing businesses to resume operations with minimal disruption.

A Tailored Approach to Risk

Lockton's new parametric insurance practice is designed to conduct comprehensive risk assessments for businesses. By collaborating with data scientists and employing advanced analytics, Lockton identifies triggers focusing on potential losses, effectively complementing traditional insurance contracts. This tailored approach not only fills coverage gaps but does so in a cost-effective way exactly where it is needed most.

About Lockton

Lockton distinguishes itself from other firms through its independence. Private ownership enables Lockton's more than 12,600 professionals across 140 countries to prioritize client needs regarding risk and insurance. With a deep understanding of global market dynamics, Lockton is well-positioned to deliver exceptional results for its clients. For further insights, visit www.lockton.com.

In summary, Lockton's innovative Global Parametric Insurance Practice represents a significant progression in the insurance sector, promising to enhance coverage solutions for businesses navigating an increasingly uncertain risk landscape.