Lockton launches Global Parametric Insurance Practice

The parametric insurance market is set to reach $39.3b by 2032.

Lockton has launched its Global Parametric Insurance Practice, aiming to provide efficient and customised parametric solutions to help clients address risks often overlooked by traditional insurance.

With the increasing frequency and severity of natural disasters, such as hurricanes and wildfires, alongside emerging risks like cyber threats and supply chain disruptions, businesses are seeking supplementary insurance solutions, Lockton noted. 

Lockton highlighted the growing demand for parametric insurance, a market set to reach $39.3b by 2032, according to Global Market Insights.

Parametric insurance offers unique benefits by providing payouts based on predefined event triggers—such as storm magnitude, rainfall levels, or earthquake intensity—rather than requiring proof of physical damage. These policies deliver transparency and rapid payouts, often within days of an event, potentially letting businesses resume operations with reduced disruption, Lockton said.

According to Peter Rapciewicz, executive vice president and practice leader of alternative risk solutions and US head of parametric solutions at Lockton, parametric insurance delivers an efficient and cost-effective approach to uncertainty, making it an attractive solution for businesses.

Lockton's new practice combines global expertise with advanced analytics and data science to perform detailed risk assessments. By identifying specific triggers for potential losses, the practice aims to provide tailored coverage that complements traditional insurance, effectively addressing coverage gaps and offering a cost-effective alternative where it is most needed.