Since opening its office in Madrid in 2022, insurtech Descartes has strengthened its commitment to the Iberian market, where it sees “enormous potential” for the development of parametric insurance, especially in the cyber field. In the words of Juan María Marqués Domenech, the firm's commercial director for Iberia, “we have managed to establish solid relationships with brokers and key companies, and to record steady growth in both premium volume and positioning.”
With more than $200 million in gross premiums written in 2024 and a medium-term target of $500 million, Descartes is accelerating its expansion in Europe with the backing of its partner Generali and the development of customized solutions in critical sectors such as energy, health, and technology. “The philosophy of parametric insurance is to tailor it to each client,” says Marqués.
One of the key launches in this strategy is Cyber Shutdown Cover, a parametric cyber insurance product that is automatically activated after a verified intrusion and provides the insured with a predefined compensation for each day of interruption. “Unlike traditional models, the client receives compensation within days and without the need for an expert assessment,” highlights the executive. The response, both from brokers and risk managers, has been “excellent.”
Since the opening of the Madrid office in July 2022, how has the business evolved in this market?
The opening of our Madrid office in 2022 marked a key milestone in our expansion in the region, and we are very pleased with the progress to date. Since then, we have managed to establish solid relationships with key brokers and companies in the Spanish and Portuguese markets, showing steady growth in both premium volume and positioning ourselves as market leaders in parametric solutions for climate risks.
What are your current strategic objectives?
Our main objective is to continue developing a strong market presence, diversifying the risk portfolio with new products and continuing to support our clients in regions with high exposure to extreme weather events (hurricanes, droughts, floods), where traditional insurance is scarce or inaccessible. In addition, we seek to expand our parametric product offering, adapting to the specific needs of different sectors and the emerging risks to which clients are exposed. We are committed to innovation, always with the aim of offering solutions that are fast, transparent, and tailored to help our clients navigate an increasingly complex environment.
How do you assess the reception of parametric insurance in this market?
The reception of parametric insurance has been very positive. The Spanish business fabric is highly internationalized, which means that its exposure to different natural risks is very high and varied, and parametric solutions are helping many corporations protect their exposure to these types of risks. Sectors such as hospitality, with very high exposure to the Caribbean, and construction and energy, with high exposure to the US, are examples of industries where parametric insurance is being very well received and growing. This is also true in sectors such as agriculture, industry, and technology, where flexibility and speed in activating coverage have been highly valued by brokers and policyholders. Exposure to contingent business interruption and the complexity of finding suitable solutions in the market also make our solutions a valuable ally for our clients.
Regarding Cyber Shutdown Cover and its parametric approach, and given its recent launch in Spain, what distinguishes this product from other cyber insurance policies?
Our Cyber Shutdown Cover is distinguished by its parametric approach, which makes it faster, clearer, and more efficient compared to traditional cyber policies. Unlike conventional products that require extensive investigation and assessment of the damage, our product is automatically activated once the parameters defined in the contract are met, i.e., once an intrusion occurs at the client or supplier we are covering. Once this is confirmed, we can confirm the coverage to the client, who then knows exactly how much they will receive for each day of downtime. And unlike traditional insurance, our client receives the previously agreed financial compensation within days, once the intrusion has officially ended.
How does the parametric model work in this specific case and what advantages does it offer policyholders?
The parametric model in Cyber Shutdown Cover is based on predefined indicators. When these parameters are met, coverage is automatically activated. Once the client resolves the intrusion and resumes activity, the amount established in the policy is automatically paid without the need for an appraisal process. The compensation is received in a matter of days, whereas traditional solutions can take more than a year. In addition, we can tailor the coverage to the client's needs, taking into account different locations, suppliers, or the seasonality of their billing.
What are the key parameters that activate coverage?
The key parameter would be the intrusion, for example, a ransomware attack. This is verified by an external provider who confirms coverage to the client within a few hours. From then on, once the time established as the deductible has passed, the client knows how much they will receive for each day of downtime.
You have adapted this product to sectors such as healthcare. Do you plan to develop specific coverage for other industries?
Yes, the healthcare sector is just one example where we have adapted our solution. It has also been very well received in the industrial and energy sectors, where cyber events cause significant losses and long downtimes until activity resumes. Of course, the philosophy behind parametric insurance is to offer solutions tailored to the needs of our clients, so we are open to adapting our solutions to other industries with specific needs.
How do you work with brokers to design customized coverage?
We work closely with our brokers to understand the specific needs of each insured party. We provide them with the tools they need to design customized coverage that best suits each client's risks. In addition, we train brokers on the advantages of the parametric approach so that they can offer more appropriate products with clear added value.
How has the product been received by brokers and risk managers? And by policyholders?
The response has been excellent from both brokers and risk managers. Brokers value the simplicity and speed of coverage activation, while risk managers appreciate the certainty and transparency of the product and the speed of payments.
Do you plan to develop more sector-specific solutions in the future?
Yes, definitely. Our strategy is to continue developing specific sector solutions, especially in areas with high exposure to emerging and climate risks. As risks evolve, so will our solutions, adapting to the emerging needs of each sector.
Following your success in France and Germany, what are your expectations for Spain and other countries in the region?
The outlook for Spain is very positive. We believe that the Spanish market has enormous growth potential, both in terms of acceptance of parametric products and expansion in key sectors. In addition, we also plan to extend our presence to other countries in the region in the medium term, supported by our success in France and Germany.
What are Descartes' growth expectations for the coming years?
Descartes has an ambitious growth vision for the coming years. We will focus on expanding our product offering, increasing penetration in existing markets, and entering new markets in Europe and beyond. Our goal is to consolidate our position as a leader in parametric solutions and continue to innovate in the emerging risks space. In 2024, we exceeded $200 million in gross written premiums, and our medium-term goal is to reach $500 million.
Are you planning any new alliances or strategic agreements to further expand your offering and presence?
Yes, we are actively exploring new strategic alliances with brokers, technology companies, and data providers that will allow us to further expand our offering and presence in the region. Of course, our expansion would not be possible without the support of our partner Generali, thanks to whom we are achieving unprecedented expansion of this type of solution throughout the world.
“Parametric cyber insurance has a bright future.”
What are the main cyber threats currently facing businesses in Europe?
The most prevalent threats include ransomware, denial-of-service (DDoS) attacks, and attacks targeting the supply chain. These threats are growing in sophistication and frequency, forcing businesses to constantly adapt to new tactics and techniques employed by attackers.
How do you see parametric cyber insurance evolving in the coming years?
I believe parametric cyber insurance has a bright future, especially as it offers faster and more transparent solutions than traditional models. With the rise of cyberattacks, companies will increasingly demand this type of insurance, which allows for a more agile and accurate response. The evolution of artificial intelligence and data analytics will also allow the parameters used to be more accurate and adaptive.
In addition to climate and cyber risks, in what other areas are you exploring the parametric approach?
Innovation is in the DNA of our more than 220 employees, most of whom have technological and scientific backgrounds. We have more than 25 PhDs from the world's most prestigious universities, as well as our own system developers. We help clients become more resilient and strategic; any emerging threat or risk that can be modeled using reliable data is a clear target for us. We are already working with the R&D (Research and Data) team in many areas to continue anticipating risk scenarios and thus offer innovative, agile, and long-term solutions.
