Parametric solutions

The capability to swiftly address natural disasters or weather-related losses is of great importance in two respects: it not only alleviates adverse ripple effects but also facilitates a prompt return to normal business operations. The cornerstone of achieving this lies in agile and adaptable risk management strategies.

Parametric products provide a simple and transparent coverage concept – for insurers, businesses and the public sector alike. What makes them so interesting is that they complement traditional insurance coverage for policyholders aiming to reduce their risk exposure. And they make it possible to cover risks that have traditionally been uninsurable.

Whether in insurance, derivative or ILS format – Munich Re is able to offer parametric solutions for a broad range of perils and client groups. The idea behind it is that we want to enable our clients in both the corporate and public sector to enhance resilience – against geophysical threats, increased weather risks due to climate change, and more frequent and extensive epidemics and pandemics. 

Parametric insurance is based on a simple principle – predetermined triggers and payout schemes facilitate swift claims settlements These triggers are established in advance and reported by independent third party institutions. When a triggering event occurs, policyholders receive a predefined payout. This means immediate financial support without going through a time-consuming claims process.