Gallagher Specialty to enhance use of parametric insurance

Gallagher Specialty has launched a parametric insurance centre of excellence designed to respond to changing market conditions and client demand.

The centre of excellence includes a team of climate risk specialists and parametric brokers that will provide clients with advice on alternative risk transfer mechanisms.

There will also be an actuarial and modelling team comprising of 15 risk professionals, including actuarial and catastrophe exposure modelling specialists with access to a range of catastrophe models.

Gallagher Specialty said the launch of the centre came as climate change “has led to the increasing frequency and severity of natural catastrophes impacting either directly on a company’s premises”.

It felt a greater use of parametric insurance could combat the increased cost of revenue impacts.

Parametric insurance is where the trigger and claims payout are preset, meaning claims processing time is reduced.

“There has been a decrease in traditional capacity for some geographies and risks, meaning clients need to access different solutions to build a comprehensive insurance programme,” Gallagher Specialty added.

Appointment

The new centre is being led by James Bosley, who has been appointed head of climate strategy for Gallagher Specialty.

Prior to joining the firm, Bosley was the UK head of insight strategy consulting at Marsh, as well as a member of the Marsh global climate team.

Bosley said Gallagher Specialty was “continuing to build and explore further capabilities to enable us to effectively assist our clients”.

“Parametric insurance, with its transparent triggers, quick pay-outs and ability to address non damage business interruption, is uniquely placed to assist with this and combat the increased cost of revenue impacts from weather or natural catastrophe events,” he added.

“Parametric solutions are incredibly versatile and we have used them for a variety of exposures across a broad range of industries, including property, heavy industries, municipalities, agriculture, financial institutions and real estate.

“They have provided and continue to provide for coverage gaps, sublimit challenges with traditional coverage, higher retentions and deductible buy downs.”