Interest from captives in parametric solutions is increasing, particularly in the property market where insureds are looking at managing rising insurance costs.
“We’ve seen a growing interest from captives in parametric solutions,” Meryl Bermond, business development manager at Descartes Underwriting, told Captive Intelligence.
She said a key driver is parametric structures allowing captives to charge the “real price” of a risk for the period covered.
“We always price the risk itself, according to past events, not past losses,” Bermond explained. “That makes all the difference, because it allows the captive manager to understand the real price of the risk.”
