Parametric insurance market to grow 12% by 2032

AXA and Munich Re are leading the parametric insurance market.

The global parametric insurance market was valued at $14.8b in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 11.5% from 2024 to 2032, according to a Global Market Insights report. 

This growth is attributed to advancements in technologies such as Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML), which enhance customer service and meet evolving requirements. 

IoT devices, including sensors, provide real-time data on asset performance, environmental variables, and other metrics critical to insurance applications.  

The natural catastrophe insurance segment held over 56% of the market share in 2023, driven by the increasing frequency and intensity of natural disasters like hurricanes, floods, and wildfires, attributed to climate change. 

Additionally, the Asia-Pacific region is experiencing robust growth due to infrastructure investments, economic expansion, and urbanisation. 

AXA and Munich Re are leading the parametric insurance market, jointly holding over 20% market share in 2023. 

AXA has expanded its offerings to address emerging risks such as cyber threats, supply chain disruptions, and pandemics, alongside traditional weather-related coverage.  

Munich Re provides customised parametric insurance solutions for insurers, corporate clients, and public sector organisations. 

Its policies offer clear and predictable coverage tailored to specific risk profiles, emphasising flexibility and adaptability to meet diverse needs.