Insurance broker Howden has created a new global unit to offer parametric insurance solutions to meet rising demand for climate de-risking capabilities.
Called Howden Climate Parametrics, the new practice brings together more than 30 experts from across Howden and the company’s underwriting unit, DUAL.
Howden said that the practice integrates Howden’s abilities in the areas of capital markets, structuring and placement, (re)insurance, analytics and advisory services to offer parametric risk transfer solutions.
Parametric insurance, which is often backed by satellite data, is a type of solution that offers pre-determined payouts when certain trigger events occur, making them suitable for several types of climate risks.
The UK-based intermediary noted that with the rising demand for climate solutions, the parametric market is growing.
It added this is expected to be accelerated by the pressure from regulators and investors to report climate risks, as well as the expansion of high-quality data sources.
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Howden Tiger global head of insurance-linked securities Philipp Kusche and Howden climate risk and resilience CEO Rowan Douglas will co-lead the new entity.
Douglas said: “Howden has made a pioneering move to combine its climate, parametrics and sector expertise into a unified global practice.
“As part of our client commitment to de-risk their resilience to climate change and low carbon futures, Howden Climate Parametrics will demystify the concept of parametrics and deliver solutions to protect assets, lives and livelihoods.”
Earlier this week, Howden launched Howden Ventures with a £500m ($609.79m) delegated underwriting capacity from entities such as Tokio Marine Kiln, Chaucer and Liberty Specialty Markets.
Howden Ventures aims to accelerate product development in the insurance industry.
The unit will initially invest £10m ($12.18m) in the insurtech sector and aims to back at least five start-ups over the next two years.