28 January 2026 / 9 min read
Specialty underwriting team - Global RE Underwriting
Speed is the core value
Parametric structures can deliver liquidity quickly when traditional loss adjustment is slow, unavailable, or too costly relative to the protection need.
The trade-off is basis risk, which must be measured and explained before the cover is placed.
Trigger design decides credibility
A good trigger is independently verifiable, difficult to manipulate, and closely related to the economic loss the cedant is trying to manage.
Rainfall, wind speed, earthquake intensity, and infrastructure disruption indices can all work, but only when the data source and payout curve are transparent.
Where the structure fits
Parametric cover is particularly useful for public-sector, municipal, engineering, marine, and infrastructure exposures where quick funds can reduce downstream loss.
Global RE reviews trigger governance, payout adequacy, and the cedant explanation of basis risk before considering support.