Parametric Insurance Solutions for Asset Management Firms

Insurance for Asset Management Firms-Parametric Insurance Solutions

Parametric insurance can be a valuable solution for asset management companies looking to manage and mitigate their climate related exposure.

Descartes’ parametric insurance solutions offers innovative balance sheet protection, applicable to any economic loss, including non-damage business interruption such as: indirect losses of revenue, contingent BI, lack of access, and others.

Benefits of parametric insurance for asset management firms

Asset management firms can reap numerous advantages by incorporating parametric insurance coverage options into their risk management and investment strategies. Some of the key benefits include:

Value Preservation through Tailored Coverage:
Descartes ensures the protection of debt-loaded investments. Unlike traditional insurance, which can take an average of 18 months for indemnification, our parametric cover provides swift payments following a triggering event, often within the same quarter, securing your investments swiftly.

Enhanced Yield & Stability:
For asset managers holding agricultural assets, Descartes collaborates with clients to develop customized solutions tailored to their specific exposures, crops, and locations. We insure a broad range of yield variations against the full spectrum of climate risks to ensure a more stable income stream.

Data-Driven Agility & Liquidity:
Leveraging advanced technology and machine learning, we offer real-time monitoring of policy thresholds. This eliminates the need for a lengthy and costly claim process, along with any on-site loss adjusters, providing enhanced agility and liquidity.

Hedging Strategies:
Parametric insurance can serve as an effective hedging tool against risks that could impact asset values and the investor or company’s balance sheet. For instance, if an asset manager holds real estate properties in flood-prone areas, they can use parametric cover to hedge against potential losses caused by flooding.

Portfolio Diversification:
By including parametric policies that cover natural catastrophes and extreme weather events unrelated to traditional financial markets, asset managers can reduce the overall risk exposure of the portfolio. By spreading risk across multiple assets, multiple perils over multiple territories, asset managers can have more certainty against peak risks.

Descartes Underwriting’s parametric insurance solution

Descartes Underwriting works with asset management firms to provide a structured and transparent approach to their risk management and transfer needs, allowing funds to enhance risk management strategies, protect investments and increase returns for investors.

For more in-depth information about how parametric insurance can revolutionize risk management for asset management companies, check out our factsheet.

Asset Management