UK corporates face an increasingly complex risk landscape. Weather extremes, supply chain fragility, infrastructure dependencies and fast-moving operational risks now sit alongside traditional property exposures. As risk managers seek solutions that respond quickly, flexibly and transparently, parametric insurance has rapidly emerged as a powerful complement to traditional indemnity insurance.
Thanks to advances in data availability, data quality and modelling capabilities, parametric insurance is evolving swifter than ever before. These innovative solutions no longer sit at the periphery of the market; instead, they are becoming a mainstream tool for addressing financial exposures that conventional insurance cannot always easily cover.
Parametric insurance operates on a simple principle: when a predefined parameter is met, a pre-agreed payout is made. Instead of adjusting a physical loss, policies rely on trusted, independent data sources to determine whether an event has occurred and to what intensity. This transparency and speed of settlement – often within days rather than months – is one of the main reasons for UK corporates’ increasing interest.
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