Chaucer to provide capacity for mid-size corporates against hurricane and earthquake damage in the US in partnership with K2 Parametric
Chaucer, the global specialty (re)insurance group, in partnership with K2 Parametric, will provide coverage for US mid-size corporates and municipalities against hurricane and earthquake damage, an area which has previously been underserved by the market.
Chaucer will be providing lead capacity for this new parametric product through the London market.
Customers of K2 Parametric can tailor their policy to determine the limits and threshold under which a pay-out is triggered. For example, a hotel that requires coverage against hurricane costs can set the limits to pay out pre-define amounts for various wind speed thresholds at pre-defined locations.
Parametric insurance is a rapidly growing segment of the insurance industry and is popular amongst users for its simplicity and the predictability of its pay-out versus traditional insurance products.
A key advantage of parametric products is the speed of payment. In many cases, claimants receive a pay-out within a month of the trigger event’s occurrence. Traditional insurance products may necessitate a loss adjustment process, which can take time. As the amount of coverage as well as the trigger event is pre-determined, the claims process for parametric products is straightforward.
The partnership with K2 Parametric is the latest parametric initiative from Chaucer, which also provides coverage for property owners that suffer losses from hurricane damage in the Caribbean. The firm also co-launched one of the first multi-peril parametric insurance product in Canada.
K2 Parametric is a parametric insurance managing general agent. It was established in 2021 in California as a subsidiary of K2 Insurance Services. It is led by Scott Carpinteri, who has 25 years of industry experience, most recently at Swiss Re, where he spent six years building a portfolio of parametric insurance business.