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Lockton's New Global Parametric Insurance Practice

Lockton, renowned as the world's largest independent insurance brokerage and consulting group, has made significant strides in addressing emerging risks through the introduction of its Global Parametric Insurance Practice. This forward-thinking initiative was announced during a recent press conference in Kansas City, showcasing a dedicated team of experts focused on leveraging data-driven solutions to safeguard businesses against unique threats often overlooked by conventional insurance.

Background and Necessity of Parametric Insurance

As various forms of risks, such as natural disasters and cyber threats, increase in both frequency and intensity, the demand for alternative insurance solutions has surged. According to projections from Global Market Insights, the parametric insurance market is anticipated to reach approximately $39.3 billion by 2032. This growth highlights the escalating need for innovative strategies that efficiently address the widening gap between insured and uninsured losses—a gap that Lockton aims to bridge with its new practice.

Diego Monsalve, the Latin America and Caribbean Head of Risk Practices and International Head of Parametric Solutions, elaborated on the significant investments Lockton has made in parametric expertise across diverse regions, including the U.S., Latin America, Europe, and Singapore. “This global team is uniquely positioned to address our clients' risk management challenges through innovation,” Monsalve stated, reflecting the company's commitment to delivering tailored solutions that meet the evolving needs of its clientele.

Why Choose Parametric Insurance?

Parametric insurance represents a transformative approach in risk management. Unlike traditional insurance policies that require the assessment of physical damage to trigger claims, parametric insurance relies on predefined triggers linked to specific events. For instance, businesses may receive payouts based on criteria such as storm intensity, rainfall measurements, or seismic activity levels in a specified area. This feature offers transparent and rapid financial relief—often processed within days of an event—allowing organizations to resume operations with minimal downtime.

Peter Rapciewicz, Lockton’s Executive Vice President and Practice Leader of Alternative Risk Solutions, emphasized the key benefits of parametric solutions, stating, “They provide businesses seeking a more efficient approach to uncertainty with the tools necessary to navigate risk while also enabling them to keep their operations steady amidst challenges.”

Comprehensive Support for Businesses

Lockton’s Parametric Insurance Practice aims to empower businesses by conducting thorough risk assessments and employing advanced analytics. By identifying potential triggers and aligning them with specific policy structures, the practice can effectively fill existing coverage gaps in traditional insurance offerings. This approach not only fortifies businesses against unforeseen events but also enhances their overall risk management framework, promoting resilience and stability.

Lockton’s commitment to this new practice assures clients that they can face uncertainties with boldness and confidence. As society continuously adapts to changing landscapes—be they environmental, economic, or technological—Lockton stands ready to lead its clients through these tumultuous times with innovative and effective insurance solutions.

About Lockton: Lockton's distinct advantage lies in its independence, allowing over 12,600 associates operating in more than 140 countries to focus purely on clients' risk, insurance, and workforce needs. Their global expertise fosters remarkable outcomes tailored to the unique challenges faced by businesses today. For further details, please visit www.lockton.com.