Echoing wider comments in the re/insurance market in recent months, respected flood risk specialist JBA Risk Management has pointed to a noted uptick in interest for its flood data from parametric schemes this year.
Speaking to Emerging Risks, JBA said that “in recent months we have seen a surge in interest to use our flood data to support parametric schemes in both emerging and established markets”.
“We expect that its role will continue to grow in markets where the simplicity of index-based schemes helps ensure fast disbursement and attracts consumers who find traditional approaches to insurance more challenging.”
Demonstrating its recent involvement in the market, JBA has supported Global Parametrics, specialists in natural disaster risk modelling for emerging markets, in the development of a successful parametric scheme to help farmers in Myanmar recover from significant flood events.
In the UK, it has also worked with parametric insurance company FloodFlash to support schemes for commercial premises.
According to the firm, “in both cases, parametric insurance offers a swift financial solution to rapidly help those affected, in areas that might previously have been considered uninsurable”.
“We are pleased to be able to offer the necessary data like the Global Flood Maps, Event Sets and a Global Catastrophe Model required to establish potential triggers and our Flood Foresight service to enable the confirmation when trigger points have been met. We look forward to supporting parametric schemes with our data in the future.”
Parametric possibilities are being widely praised in the wider market at the moment.
Last month, Damian Glynn, director, and head of financial risks at loss adjusters Sedgwick International, said the use of parametric triggers can fill the gaps in cover for a range of corporate risks as the market looks to meet demand and create new opportunities.
Speaking to the insurance Institute of London, Glynn said the emerging use of parametrics is being viewed as a way to insure risks that have previously been uninsurable.
The move from full indemnity to an agreed sum payable when a fixed trigger is reached will open up new risks for the market, he said but only if insurers have carried out proper analytics.
“It will assist the market and it is not something to be terrified about,” added Mr Glynn.