By Henry Gale

May 7 - (The Insurer) - The London market has often been at the forefront of covering risks too complex or unusual for standard insurance products. In recent years, these have included some parametric policies.

FloodFlash’s sensor-triggered flood coverage was backed by Everest’s Lloyd’s syndicate at its 2018 launch, then later by Munich Re syndicates 1840 and 457 and Hiscox London Market. Lloyd’s insurer Tokio Marine Kiln provides lead capacity to digital downtime and reputation index policies from Parametrix and Steel City Re.

Generally, London market insurers have underwritten more experimental parametric products, extending the concept of index-based coverage to new perils or customer segments. Corporate insurance for hurricanes, earthquakes, agriculture and energy – the most widely adopted parametric covers – remained the turf of large, mostly continental European firms, such as Swiss Re, Munich Re, Axa and Generali.

That is now changing. In this month’s edition of Parametric Insurer, we exclusively report that Cincinnati Global Syndicate 318 has agreed a binding authority deal with Yokahu to underwrite parametric natural catastrophe cover. Yokahu’s cat-risk.com exchange is providing limits of up to $5 million for tropical cyclone risks backed by London market carriers.

We were also first to report last month that CelsiusPro’s Global Parametrics had become a coverholder with support from Canopius, underwriting tropical cyclone and earthquake among other natural perils.

Last year, Ascot announced it had launched capabilities to underwrite parametric nat cat from its London market platform, while Everest revealed it was underwriting parametric risks when it said its London-based head of global specialties would be responsible for parametric solutions.

Chaucer entered the parametric weather insurance market in 2024, covering energy, agriculture and other sectors, having partnered with MGA K2 Parametric to underwrite commercial nat cat risks since 2022. Meanwhile, NormanMax launched the first Lloyd’s syndicate dedicated to writing parametric nat cat, with an initial focus on tropical cyclones and earthquakes.

London-listed Beazley is another specialty carrier pushing into parametrics, with $50 million line sizes for SRS Altitude that rival the largest players in parametric nat cat. This is underwritten through Beazley’s Dublin-based European entity rather than its Lloyd’s platform. Beazley had announced in 2023 that it would underwrite parametric weather risks including energy and agriculture at Lloyd’s with Arbol.

Beazley’s partnership with Altitude, an MGU made up of mostly ex-Swiss Re alternative risk specialists, has echoes of Generali’s relationship with Descartes Underwriting, formed while the latter was a small startup led by those who had pioneered parametrics at Axa.

Generali and Descartes went on to build one of the largest parametric portfolios in the market. Descartes said it wrote more than $200 million in premiums last year across its MGA and France-domiciled insurer (which recent disclosures show wrote $18.9 million in 2024).

So it is no wonder that large specialty carriers have been eyeing up parametric corporate and reinsurance risks. In the London market and beyond, companies that had until recently never written parametric business have begun to deploy meaningful capacity to the types of parametric covers that are transacted at the greatest volume.