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Lockton Launches Global Parametric Insurance Practice

Lockton, the world’s largest independent insurance and benefits brokerage firm, has recently announced the establishment of its new global parametric insurance practice. This initiative comes at a time when businesses face increasing challenges related to risk management due to natural disasters and cyber threats. With a goal to bridge the gap between insured and uninsured losses, Lockton's parametric insurance solutions are designed to offer swift and efficient financial support to organizations.

A Focused Approach to Risk Management

The newly formed practice gathers a specialized team comprising analysts and data modeling experts dedicated to creating tailored parametric insurance solutions. According to Diego Monsalve, the regional leader for risk practices in Latin America and the Caribbean, Lockton has heavily invested in parametric knowledge and resources across various regions, including the U.S., Latin America, Europe, and Singapore over the past three years. This extensive experience positions the firm well to tackle the unique risk management challenges their clients encounter.

Monsalve stated, "This global team is exceptionally ready to address our clients’ challenges in risk management, leveraging innovation and high-caliber solutions they expect from Lockton. We look forward to assisting our clients through this initiative."

Rising Demand for Parametric Solutions

The growing frequency and intensity of natural disasters such as hurricanes and wildfires, alongside new risk factors like cyber threats and supply chain disruptions, have significantly bolstered the demand for supplemental insurance solutions. Forecasts from Global Market Insights predict that the parametric insurance market could reach a valuation of $39.3 billion by 2032, indicating a clear need for alternative solutions to complement conventional commercial property insurance.

Peter Rapciewicz, Executive Vice President and leader of Lockton's alternative risk management solutions, further elaborated on the benefits of parametric coverage. He stated, "Parametric insurance solutions provide significant advantages that meet the needs of businesses seeking a more effective and cost-efficient approach to uncertainty. Our investment in global parametric practices underscores our commitment to deliver resilient solutions that not only provide financial protection but also allow businesses to operate smoothly amidst emerging challenges."

How Parametric Insurance Works

Parametric policies differ from traditional insurance by providing payouts based on specific trigger events, such as storm categorization, rainfall levels, or the intensity of an earthquake in a specified location, regardless of physical damages. This model ensures transparency and expedites payments, often processed within days following an event, reducing operational disruptions significantly.

Lockton's parametric practice aims to conduct comprehensive risk assessments using data analysts and sophisticated analytics to identify trigger events for potential losses. This customized approach is crafted to enhance conventional insurance practices by filling gaps in coverage in a cost-effective and adaptable manner.

The Advantage of Independence

One of Lockton’s distinguishing features is its independence, giving it a unique advantage in the insurance industry. The firm’s private ownership structure enables more than 12,600 associates to operate in over 140 countries, focusing solely on client needs concerning risk and insurance. With access to specialists worldwide, Lockton possesses in-depth knowledge essential for achieving superior outcomes.

For more information about Lockton's new offerings and their innovative approach to risk management, visit www.lockton.com.

About Lockton

Lockton is the world's largest privately held independent insurance brokerage firm, providing a wide range of insurance and risk management services to clients across various sectors. Their continued commitment to client-focused service and innovative solutions solidifies their position as leaders in the industry.