APAC disaster risks push parametric market to $23b this year

Regional vulnerability to hurricanes and earthquakes accelerates fastest global growth rates.

The global parametric insurance market is projected to record a compound annual growth rate of 12.2% from 2026 to 2035, according to Global Market Insights.

The market was valued at $19.4b last year and is seen to reach $22.6b this year.

In nine years, the sector will likely accumulate about $63.8b, driven by the increasing frequency and severity of climate-related disasters such as hurricanes, floods, earthquakes, and droughts across many regions.

The report further said that natural catastrophe risks are often widespread and difficult to assess quickly through traditional insurance models. 

Parametric solutions allow insurers and reinsurers to design transparent coverage structures based on reliable environmental data from meteorological stations, satellites, and seismic monitoring systems.

The specialty parametric insurance segment is expected to experience a faster growth of more than 13.5% over the forecast period, pushed by the rising demand for customised risk protection solutions across industries such as renewable energy, tourism, aviation, and event management.

According to the report, Asia-Pacific is surfacing as one of the fastest growing regions for parametric insurance, due to higher disaster risks.