Gallagher Specialty has created a Parametric Insurance Centre of Excellence designed to respond to changing market conditions and client demand, with alternative risk transfer solutions being accessed by a wider group of clients than ever before.
Climate change has led to the increasing frequency and severity of natural catastrophes impacting either directly on a company’s premises, or indirectly through non-damage business interruption, to their operations or supply chains. 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 programme. The centre of excellence includes a team of climate risk specialists, parametric brokers and an actuarial and modelling team, along with market-leading risk modelling technology, developed in-house by Gallagher Specialty.
This specialist team will provide clients with advice on alternative risk transfer mechanisms to strengthen their traditional insurance portfolio and to support clients’ ongoing resilience and adaptation journeys.
The actuarial and modelling team comprises of 15 risk professionals, including actuarial and catastrophe exposure modelling specialists with access to a wide range of catastrophe models in partnership with market-leading risk management groups RMS and AIR. The teams in-house developed bespoke models, using software tools such as Eigenprism and Spatial Key, for specific perils including wildfire, hail and secondary perils not covered by mainstream model providers in-depth provides insight for clients not available elsewhere in the market.
The practice is being led by James Bosley, who has been appointed Head of Climate Strategy for Gallagher Specialty. He has a wealth of experience advising clients on risks associated with climate risk transfer, parametric solutions and advisory services.
Prior to joining Gallagher, James 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 centre of excellence, James, explained: “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 pay-outs and ability to address non damage business interruption, is uniquely placed to assist with this and combat the increased cost of revenue impacts from weather and/or natural catastrophe events.
“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.”
“We are continuing to build and explore further capabilities to enable us to effectively assist our clients’ in navigating this transforming risk landscape.”