Global insurance giant AXA has launched a new unit focused on expanding its development and sales of parametric insurance and risk transfer products, and has named Tanguy Touffut as the units CEO.
AXA has named its new parametric insurance unit AXA Global Parametrics, which could cause some confusion with the Global Parametrics venture that is starting up with the backing of the German government’s Climate Insurance Fund, run by KfW and UK government’s Department for International Development.
AXA is aiming to accelerate the development of parametric insurance solutions at the group and to expand the target offering to include SMEs and individuals as well.
AXA’s parametric insurance team had previously sat under the AXA Corporate Solutions banner, offering parametric and index based climate, weather and catastrophe insurance solutions to large corporates, institutions and governments.
The new AXA Global Parametrics unit is being launched to broaden the range of solutions to better serve AXA’s existing client base, and to expand its scope to SMEs and individuals.
“Parametric insurance has proven to be a high growth startup business over the last two years, and I am convinced it can scale up under the leadership of Tanguy Touffut. In line with Ambition 2020, AXA Global Parametrics will also contribute to the Group’s transformation through an enhanced customer experience, optimizing many steps in the traditional insurance process, and amplifying the scope of the insurable,” commented Gaëlle Olivier, CEO of AXA Global P&C.
AXA Global Parametrics will work alongside the insurers’ P&C business and Group Innovation team to design a range of parametric products to cover risks in many forms, targeting mature and emerging market use-cases.
“AXA Global Parametrics will be one of the key enablers for selected initiatives fuelled by the Innovation team with a strong focus on accelerating our blockchain ambition for a more transparent and seamless customer experience,” stated Hassan El Shabrawishi, Chief Innovation Officer of AXA.
Tanguy Touffut, previously Global Head of Parametric Insurance at AXA Corporate Solutions, has been named as CEO of AXA Global Parametrics, effective March 1st, and will report directly to Gaëlle Olivier.
“The parametric approach offers a simple, accurate, transparent, and affordable insurance solution to clients worldwide. For instance, AXA can provide custom covers based on weather or vegetation indices, using high-resolution satellite data to measure soil moisture or plant development,” explained Touffut.
Parametric insurance coverage is increasingly an area of focus at large traditional insurance and reinsurance groups and is of great interest to ILS funds and investors, who find parametric solutions a complementary way to bring additional weather or catastrophe risks into their portfolios.
It’s interesting that AXA mentions the blockchain, as clearly there is a focus among some Insurtech startups in integrating parametric triggers with the blockchain, in order to make contracts transparent, traceable and pay-outs rapid.
AXA clearly sees signs that the world is moving more towards a parametric mindset, and that traditional indemnity based insurance products are not always the right solution, both from a coverage and customer experience point of view.
AXA can also expect to find support from alternative reinsurance capital providers available, should it need to cede parametric risk portfolios or to work alongside third-party capital providers in this venture.