Gallagher Establishes Parametric Insurance Hub

Gallagher Specialty recently announced the creation of a parametric insurance center of excellence in response to changing market conditions and an increased demand for alternative risk transfer solutions.

Gallagher said that climate change has led to the increasing frequency and severity of natural catastrophes impacting companies either directly on their premises or indirectly through nondamage business interruption to their operations or supply chains.

Gallagher continued by stating that there has also been a decrease in traditional capacity for some geographies and risks, meaning clients need to access different solutions to build a comprehensive insurance program.

Led by James Bosley, Gallagher's center of excellence includes a team of climate risk specialists, parametric brokers, and an actuarial and modeling team, along with risk modeling technology.

Prior to joining Gallagher, Mr. Bosley was the UK head of insight strategy consulting at Marsh as well as a member of the Marsh global climate team, where he was responsible for product innovation to support clients with the climate change transition.

Commenting on the new center of excellence, Mr. Bosley said, "With the increase in frequency and severity of natural catastrophes, as well as the associated changes in weather patterns, brokers must think more broadly about clients increasing exposures. Not only must we help them de-risk, but also help provide a level of resilience. Parametric insurance, with its transparent triggers, quick payouts, and ability to address nondamage business interruption, is uniquely placed to assist with this and combat the increased cost of revenue impacts from weather and/or natural catastrophe events."

He continued, "Parametric solutions are incredibly versatile, and we have used them for a variety of exposures across a broad range of industries, including property, heavy industries, municipalities, agriculture, financial institutions, and real estate. They have provided and continue to provide for coverage gaps, sublimit challenges with traditional coverage, higher retentions, and deductible buy downs."