Rowan Minhas, an Account Handler within Miller’s Onshore Energy team focusing on Parametric insurance solutions, said the market conditions for parametrics are similar to the last London market update, and insureds need to act fast to secure capacity before it’s exhausted.
Minhas observed a significant increase in the deployment of parametric Gulf of Mexico named windstorm aggregate since the last update.
Insureds are advised to make haste in getting to market to secure capacity as some carriers have exhausted aggregate in certain areas, Minhas noted in Miller’s London market update – Part II.
There has been a 10% increase in renewal pricing following payouts from Hurricane Ian, and weather-related parametrics, including Storm Elliot and winter freeze, Minhas explained.
Despite this increase, parametric insurance can still be competitive with traditional markets where pricing is increasing at a higher rate, and it doesn’t require deductibles on insured’s balance sheets as traditional property programs do.
However, wildfire and earthquake triggers are becoming more popular, leading to aggregation issues in California.