Howden, the London-based insurance group, announced the creation of Howden Climate Parametrics, a global practice that brings together re/insurance, climate, and data expertise to focus parametric risk transfer solutions on meeting the escalating demand for climate derisking capabilities across industries, financial markets and the public sector.
The practice brings together over 30 specialists from across Howden and the group’s underwriting business, DUAL – combining climate, analytics and advisory, structuring and placement, re/insurance, underwriting and capital markets expertise.
The practice will be co-led by Philipp Kusche, global head of Insurance Linked Securities (ILS), Howden Tiger, in New York, and Rowan Douglas, the recently appointed CEO of Howden’s Climate Risk and Resilience team, based in London.
Parametric insurance, which was pioneered in the reinsurance and energy markets, offers pre-determined pay-outs based on specified trigger events, Howden explained. A unique benefit is the speed and transparency of these payouts, which is essential for financial institutions looking to hedge exposure to weather, carbon or commodity risks as well as humanitarian agencies seeking urgent resources after a disaster.
Parametrics, often enabled by satellite data, can help provide financial protection in emerging and frontier markets and have a fast-growing market share. Parametric insurance is well suited to many climate risks, including natural catastrophes and the performance of carbon markets, Howden said.
The growing climate demand is transforming the potential scope and scale of the parametric market, Howden said, noting that the push from regulators and investors to disclose climate risks, together with burgeoning high quality data sources, will accelerate demand.
Howden said its new practice will be part of the solution by delivering opportunities to help parametrics fulfill its potential to derisk the resilient net zero transition and protect natural capital.
The practice will harness Howden’s sector acumen, key partnerships, data, analytics and modeling resource to drive technical innovations across resilience and decarbonization. It will bring together reinsurance and capital markets to create parametric products that build resilience to multiple hazards for corporates and communities. This builds on the solutions that Howden and its partners have already delivered protection for: smallholder farmers in Jamaica and Africa; people living near 10 active volcanoes; two marine protected areas in the Philippines and Belize, and agriculture solutions delivered by DUAL in South America.
“The curiosity and excitement surrounding parametrics as part of the climate solution, was palpable at New York Climate Week in September,” commented Rowan Douglas, CEO Climate Risk and Resilience, Howden.
“From infrastructure to agriculture, urban resilience to mangroves, through to the carbon markets, everyone wants to learn more, but this wider curiosity is often matched by confusion. It is a new area for many in the climate mainstream with strange jargon and different concepts,” Douglas added. “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 derisk 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.”
“Howden is scaling up and enhancing its capabilities to lead the market response to climate change. Our strong presence at the Monte Carlo Rendezvous and New York Climate Week this year symbolises our ability to deliver across the value chain and fulfil the structural demand for more resilience and financial solutions to the greatest challenges created by climate change and the net zero transition,” according to Philipp Kusche, global head of ILS, Howden Tiger.
“Our collective approach, and our rapidly expanding Climate Risk and Resilience practice, creates a powerhouse of parametric potential that we look forward to deploying to serve our clients and to build this vital market with our carrier partners,” Kusche continued.
Stuart Martin, Parametric Solutions Lead in the Howden Climate Risk and Resilience Hub, will coordinate the practice.
Source: Howden
Topics New York New Markets
Was this article valuable?
Here are more articles you may enjoy.
‘Great Resignation’ Enters Third Year as Workers Embrace AI, Upskilling, PwC Says 
Big ‘I’ Report: Independent Agency Channel Placed 62% of Premiums in 2023 
Three Charged With Helping Agents Cheat on Florida Insurance License Exams 
GEICO Tops Progressive With Higher J.D. Power Scores 
