Article ID: 9d90e568f0e28db4345eadb970d32cbe120f5c37c2ddf8f400aa823c7ea3a007
Source ID: secondary:businessinsurance.com
Published At: -
Extraction Method: bs4_heuristic
URL: https://www.businessinsurance.com/parametrics-give-captives-a-new-lever-for-catastrophe-risk/
Body Text
Parametrics give captives a new lever for catastrophe risk - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Parametrics give captives a new lever for catastrophe risk by Gavin Souter Alternative Risk Transfer/Captives Arthur J. Gallagher & Co. , Marsh & McLennan Feb 6, 2026 ORLANDO, Fla. — Captives can be used to transform traditional indemnity coverage into a parametric program and to tailor coverage for catastrophe-exposed risks, a panel of experts said. Policyholders can often see significant savings on lower layers of excess insurance towers, they said. Parametric insurance coverage offers simple, transparent protection for specific exposures, said Marleen Nyst, San Francisco-based senior vice president of parametric product solutions at Marsh Risk. She spoke Friday at the World Captive Forum, sponsored by Business Insurance. “We use our clients’ exposure, their risks, their information, to come up with parametric structures that are very carefully structured and therefore accurately capture the specific risks,” she said. Parametric insurance is usually structured with an agreed trigger, such as wind speed at a specific location, and the full limit is paid within 30 days if the policyholder suffers a loss, Ms. Nyst said. Parametric programs can also be structured to provide incrementally higher limits based on the strength of a hurricane, and they can be used to cover non-owned risks, such as a trigger tied to a port facility that a company relies on, she said. In addition to property damage, the programs can cover non-damage business interruption, lost goods, contractual penalties, extra expense, operational costs and other nontraditional risks, Ms. Nyst said. When new risks are brought into a captive, though, owners should inform regulators of the coverage expansion, said Brendan Helt, Pittsburgh-based vice president, business development, at Artex Risk Solutions, the captive management unit of Arthur J. Gallagher & Co. Programs can be structured so that a captive provides traditional indemnity coverage to a parent company’s subsidiaries, depending on their needs, while the excess-of-loss coverage is parametric, he said. “The captive essentially backstops itself and protects its balance sheet by purchasing this cover as parametric,” he said. A captive can integrate parametric coverage in various ways, such as a proportional coverage or on an excess-of-loss basis, Ms. Nyst said. Parametric insurance also can be used to replace lower levels of coverage, said Evan Glassman, West Palm Beach, Florida-based CEO of Lomond Risk. “If you’re looking at traditional property insurance or reinsurance, the bottom layers of any program are typically a lot more expensive than what a parametric costs,” he said. For example, a $10 million line on a lower level of coverage might cost $3 million, but a parametric coverage could cost less than $1 million, Mr. Glassman said. Related News Huge jump in U.S. net underwriting gain: Report February 6, 2026 January storm losses estimated at $4-7B: Fitch February 6, 2026 Third-party business turns captives into profit centers: Panel February 6, 2026 Your honey is lying to you: pantry fraud on the rise February 6, 2026 Calif. budget proposal, bill aim at struggling comp fund February 6, 2026 Small volume, big cost impact from psychotherapeutic, neurological drugs February 6, 2026 Uber ordered to pay $8.5 million in trial over driver sex assault claims February 6, 2026 The BI Top 10 for the week of Feb. 2, 2026 February 6, 2026 Illinois bill ties business licensing to comp February 6, 2026 Facebook-f X-twitter Linkedin-in Business Insurance is a singular, authoritative news and information source for executives focused upon risk management, risk transfer and risk financing. Never miss important news: Become a Business Insurance Online subscriber today Subscribe Now Information About Us Contact Advertise Privacy Policy Terms & Conditions Copyright 2026. BUSINESS INSURANCE HOLDINGS Member, Beacon International Group, Ltd.
Metadata (JSON)
{
"score": 15
}