Parametric risk transfer products from New Paradigm Underwriters will now be listed on the electronic reinsurance trading platform X-gRm with TigerRisk Partners acting as intermediary, and up to $100 million of capacity set to be made available.
New Paradigm Underwriters is the creator of the parametric re/insurance products Hurricane PM™ & Industry Parametric Protection™ (IPP), which utilise proprietary technology featuring hurricane hardened anemometers to offer supplemental insurance coverage products, as well as risk transfer products for reinsurance or retrocession purposes.
New Paradigm is looking to trade up to $100 million of capacity through the X-gRm platform, which was developed from Xchanging as a reinsurance deal placement and distribution platform, and to which TigerRisk Partners was the first subscribing broker.
TigerRisk Partners will act as the intermediary for the parametric risk transfer products, the broker uses the X-gRm platform to place all of its reinsurance business.
“The X-gRm platform benefits both insurers and capital providers in several important ways,” explained Patrick Gonnelli, Partner and Global Head of ILS Distribution and Trading at TigerRisk Capital Markets & Advisory.
“It provides all parties with full, up-to-date information in one central location, it streamlines the workflow process, and it creates a more efficient market.”
New Paradigm Underwriters specialises in offering risk transfer solutions that can cover historically difficult or impossible to insure exposures, as well as coverage for losses below traditional insurance deductibles.
The parametric trigger risk transfer technology is already used by insurers, reinsurers, and ILS funds as a form of reinsurance or retrocessional protection.
With cedants looking to diversify the risk transfer triggers they use when hedging their portfolios, or to cover exposures using parameters derived from the covered events themselves, the New Paradigm products will now become more widely available to new potential cedants or counterparties.
“Industry Parametric Protection (IPP) is a new concept. Using the X-gRm platform enables us to quickly and accurately present a complete picture of how IPP can be an efficient hedge with unique benefits such as transparency and speed of settlement as compared to other alternatives to potential purchasers within the (re)insurance markets,” commented Evan Glassman, President and CEO of New Paradigm Underwriters.
The proprietary parametric triggers used can provide for transparent triggering risk transfer, insurance or reinsurance, with coverage that can pay out rapidly due to the parametric nature of the underlying index data, in contracts varying from per-occurrence, to aggregate or second-event structures.
The parametric risk transfer products are also attractive to the ILS market as investment opportunities, with some of the capacity backing such transactions often sourced via the capital markets.
Bringing parametric triggers onto a technology driven reinsurance trading platform should help to make their execution and placement more seamless as well, a good example of insurance technology (InsurTech) helping to increase the market’s efficiency.
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