Parametric Insurance for Real Estate

The Solutions We Provide

Why Parametric Works 

✓ Rapid liquidity: Payouts confirmed in days and paid in weeks, providing critical liquidity during the post-event recovery period.

✓ Flexible capital: Payouts are not tied to specific loss assessments and can be used to support deductible funding, liquidity needs, or broader financial recovery.

✓ No on-site claims adjustments: Coverage is triggered by predefined catastrophe parameters, reducing reliance on lengthy traditional adjustment processes.

✓ Complements traditional insurance: Parametric solutions can address gaps such as high catastrophe deductibles, excess layer shortages, or peril carve-outs.

✓ Portfolio-friendly: Structures can be designed for single assets, grouped exposures, or broader institutional real estate portfolios.

FAQ

What exactly does parametric insurance cover for real estate?

Unlike traditional insurance, which pays based on actual on-site assessment of physical damage, parametric insurance triggers based on predefined objective parameters linked to a catastrophe event, such as wind intensity, earthquake magnitude, or flood severity.

Is this a replacement for traditional property insurance?

No. Parametric insurance is complementary. It is designed to work alongside traditional programs and address specific protection gaps.

Can parametric insurance help reduce large catastrophe deductibles?

Yes. One of the most common use cases in real estate is using parametric cover to buy down large retained catastrophe deductibles.

Can this be structured at the portfolio level?

Yes. Parametric solutions can be designed to protect a portfolio of assets rather than only a single insured location.

How fast is the payout, and what can the funds be used for?

Payouts are typically released quickly after a qualifying event. Because the payout is based on the event’s intensity rather than a traditional loss adjustment, the capital is flexible and can be used wherever liquidity is needed most.

What information is needed to get a quote?

We typically need:

• The specific insured location(s) or portfolio composition
• Desired policy limit
• Relevant historical pain points or past catastrophe losses 

Is parametric insurance expensive?

Not when you look at the full picture.

Parametric insurance is designed to fit your budget. Our underwriters and R&D team work with each client to structure coverage across dozens of options, adjusting triggers, payout layers, and thresholds to match what you actually need and what you can afford.

Pricing is risk-based, not market-based. Because we use historical event data rather than market cycles to set premiums, your pricing stays stable and predictable year over year. No surprise renewals, no volatility. Just a reliable number you can plan around.

There are also no hidden costs. No deductibles buried in the fine print, no coverage carve-outs discovered at claims time. What is agreed upfront is what gets paid. And that changes the comparison entirely. Traditional insurance pricing does not tell the full story: sublimits, deductibles, and retained exposure means the price is rarely what you actually pay. Meanwhile, parametric fully covers a peril, with no adjusters and no surprises. 

And when a claim is triggered, it pays fast. After Hurricane Melissa hit Jamaica in 2025, one of our clients received a $5 million payout in 22 days, with no adjusters, no disputes, and no delays. That liquidity funded emergency response, temporary repairs, and cash flow needs at exactly the moment they arose. That kind of liquidity is worth far more than a cheaper policy that takes 18 months to settle.

When you compare parametric cost against traditional cost plus retained exposure, and factor in speed, transparency, and the absence of hidden friction, parametric insurance is not just competitive. For many risks, it is the smarter buy.

What is basis risk in parametric insurance, and how should it be understood?

Basis risk in parametric insurance is the gap between a client’s actual loss and the payout triggered by a predefined index (e.g. wind, speed, rainfall). It is often seen as a drawback, but in reality, it exists in all insurance products. The difference is that parametric insurance makes it explicit and measurable upfront, whereas in traditional policies it remains hidden in deductibles, exclusions, sub-limits, or claims processes. Rather than a flaw, basis risk is something that can be engineered and reduced through careful index selection, client-specific calibration, and ongoing model updates.

Does parametric still make sense when the traditional market is softening?

Yes, because the gaps it addresses are structural, not cyclical.

Claims timing and NDBI exclusions are permanent features of traditional programs that do not disappear when rates soften or capacity returns. While catastrophe deductibles and sub-limits may shift over a market cycle, at this stage of the softening market there have been no meaningful changes. A property owner with a high hurricane deductible retains that exposure regardless of the current pricing environment. 

The same applies to claims timing. A traditional aggregate program that pays in full still takes 6–12 months to settle. Parametric buys certainty of timing, not just coverage, and that value is independent of the pricing environment.

In a soft market, the conversation shifts from "I cannot get coverage" to "I want to optimize my program." Parametric fits naturally into that conversation as a complement, not a substitute.