WTW and Swiss Re Launch Parametric Policy Triggered by Forecasts

WTW has introduced a parametric insurance policy that activates when a red weather warning is issued by the UK Met Office or Met Éireann, marking what it calls a market-first solution. Developed in collaboration with Swiss Re Corporate Solutions, which underwrites the policy, the coverage responds not to actual weather events but to the forecasted risk itself.

This structure offers financial protection based solely on the issuance of a red weather warning—typically reserved for high-impact conditions such as severe winds, heavy rainfall, snow, or ice. These warnings are issued when there's a high risk to life and property and substantial disruption to travel. In January 2025, Storm Éowyn triggered a red warning, with winds reaching 114 mph, leading to power outages, infrastructure damage, and commercial insurance claims exceeding €240 million in Ireland alone.

Conventional insurance typically responds only to physical damage resulting from severe weather. In contrast, the new policy is designed to cover the financial consequences of pre-emptive actions taken after a red warning is issued, even if the forecasted conditions do not ultimately materialize.

Claire Wilkinson, managing director, alternative risk transfer solutions at WTW, said, "By triggering the parametric policy on the forecast rather than the event, the insured receives a pre-agreed payout that can cover lost revenue and operational costs due to actions taken in anticipation of weather-related disruption, even if the event does not manifest itself as was forecast."

This approach is especially relevant for sectors like hospitality, where businesses often cancel events or close operations based on red warnings—decisions that carry financial repercussions even in the absence of actual storm damage.

Nina Arquint, CEO UK & Ireland at Swiss Re Corporate Solutions, said, "We are very pleased with the launch of this innovative solution for our UK- and Ireland-based clients as extreme weather events are increasingly impacting their businesses. I believe this also demonstrates that parametric insurances have established themselves well in the European markets."