Industry loss warranties (ILWs) remain a useful and well-established instrument within the capital management toolbox of risk carriers, but do have their drawbacks, some of which can be mitigated or removed entirely by a parametric structure, according to Skyline Partners.
As parametric insurance, reinsurance, and retrocession structures continue to grow in popularity, Artemis spoke with Laurent Sabatié, Co-founder and Executive Director, and Ken MacDonald, Strategic Advisor of Skyline Partners, a full-service provider in the parametric insurance supply chain.
ILWs are an indexed-based reinsurance instrument which pays out when the estimated total industry-wide insured loss arising from a specific, covered event or group of events exceeds an agreed threshold, as calculated by a third party.
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