Across Asia, Africa and the Middle East, parametric models are being deployed to counter natural catastrophes, cyber outages and agricultural disruption.
Parametric insurance is evolving into a mainstream solution for rapid recovery and resilience in underinsured regions.
Delegates at the Dubai World Insurance Congress (DWIC 2025) heard from a panel discussion on the data-driven topic.
“Parametrics is not about replacing traditional insurance but complementing it,” said Blanca Berruguete, EMEA head of client management at Descartes Underwriting. “We need to innovate. We need to create new risk-transfer solutions, and I feel parametric is a very good product.”
She said the global parametric market was worth $60.2bn in 2024 and is projected to grow significantly by 2034, driven by demand across catastrophe-prone regions and sectors like agriculture, energy and infrastructure. “The future is bright for parametric—capacity, innovation and recognition of its unique benefits are positioning it at the core of innovative solutions.”
The core appeal, said Berruguete, lies in the product’s transparency and efficiency. “Parametrics is basically capacity providers working on predefined triggers and predefined payouts. There’s no loss adjustment, everything is predefined, and it’s all about getting access to your loss history data.”
Chris Mackinnon, regional director for Asia Pacific, Middle East and Africa at Lloyd’s, said: “When we think about general insurance, we’re talking about a promise to pay—just not when or how much or how long it will take. Parametric flips that on its head. It’s black and white.”
He pointed to a Lloyd’s-backed product in Far North Queensland that paid out to insureds automatically the morning after a cyclone hit. “There was no discussion around policy wording or interpretation. The money was in that community the next morning.”
Both speakers noted the speed of claims settlement and the ability to structure products around verified third-party data as essential benefits. Mackinnon recalled a meeting with 150 staff at Australia’s insurance ombudsman AFCA, who asked only one question after a three-minute explanation of a parametric product: “Are you trying to put us out of business?”
Across Asia, Africa and the Middle East, parametric models are being deployed to counter natural catastrophes, cyber outages and agricultural disruption.
“There is a huge opportunity at government level,” said Mackinnon. “Often, it’s not the damage of a natural catastrophe that destroys a community—it’s the after-effects. Parametrics get cash into those communities quickly.”
Descartes is active in projects covering offshore wind farms in Vietnam, expressways in the Philippines, drought and flood protection in Africa, and wildfire-linked carbon credit schemes in Australia.
“We’re combining parametric and emerging risks,” Berruguete explained. “For instance, we use satellite imagery to detect wildfires and assess damage with high granularity.”
Still, she warned that developing effective indices requires careful judgement.
“Technology may say yes to nearly everything that can be measured, but at Descartes we ask: should we? And if yes, how? The index must be resilient, scalable and fair.”
Mackinnon agreed the challenge is less about technical feasibility and more about communication. “Nobody trusts it because it’s too simple,” he said. “If it’s that easy, why have we been selling 400-page policies all these years?”
He described Lloyd’s Lab as increasingly populated by engineers and data scientists rather than traditional underwriters. “We’re seeing scientists come in saying, ‘We have the data, how can we turn it into insurance?’ And that’s an exciting place to be.”
Berruguete added: “Right now I’m surrounded by scientists, not actuaries—and that’s amazing.”
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