Parametric insurance market set to hit $51.3b by 2034

Asia-Pacific will be the fastest-growing region.

The parametric insurance market is expected to reach $51.3b by 2034, driven by a compound annual growth rate of 12.6%, according to a new forecast from Global Market Insights.

The report also estimated the market was valued at $16.2b in 2024. Growth is expected as more businesses face climate-related risks and seek insurance products that provide quick, automated claim settlements.

Adoption is rising across sectors such as agriculture, energy, travel and supply chain-dependent industries. Companies are increasingly using parametric covers for weather-related disruptions, natural catastrophes and business continuity planning. 

The report said natural catastrophe-related policies accounted for 70% of global parametric premiums in 2024, whilst corporate buyers made up half of total demand.

The study found that advanced technologies such as IoT, AI and machine learning are supporting market expansion by enabling real-time data capture and precise trigger mechanisms. 

Blockchain-based smart contracts are also being used to automate payments and reduce fraud.

Asia-Pacific was identified as the fastest-growing region due to high exposure to climate risks and rising awareness of alternative risk-transfer options.

Major players active in the segment include AXA, Allianz, Chubb, AIG, Aon and Lloyd’s of London.