K2 Parametric, Chaucer partner on hurricane & quake solution for mid-size corporates

K2 Parametric, a parametric insurance managing general agency (MGA) launched last year by K2 Insurance Services, LLC, has partnered with global specialty insurance and reinsurance group, Chaucer, to boost its line size capability for a new parametric solution via the London market.

Chaucer, a China Re company, will be providing lead capacity for mid-size corporates against hurricane and earthquake damage in the U.S. in partnership with K2 Parametric.

The additional limit from re/insurer Chaucer boosts the total K2 Parametric line size capability to $15 million, targeting an area of the market which the pair state has been previously underserved.

K2 Parametric clients can tailor policies to determine both the limits and threshold under which a pay-out is triggered. For example, explain the pair, a hotel that requires protection against hurricane damage can set the limits to pay-out pre-defined amounts for a range of wind speed thresholds at pre-defined locations.

As our readers will be aware, one of the main advantages of parametric insurance products is the speed of payment post-event as there’s no need for a loss adjustment process, which can be timely, with many claimants receiving pay-out within a month of an event triggering their policy. As a result, the use of parametric insurance is growing around the world.

This is the latest parametric initiative from Chaucer, building on its co-launch of one of the very first multi-peril parametric insurance products in Canada, while the company also offers coverage for property owners that experience losses from hurricanes in the Caribbean.

K2 Parametric was launched in November of last year with Scott Carpinteri, who was previously at Swiss Re Corporate Solutions, as its lead.

“It’s a pleasure to be working alongside a carrier of Chaucer’s stature, to provide coverage for small to mid-size corporates through the Lloyd’s market,” said Carpinteri. “Parametric insurance, such as the product offered by K2, can help mid-size businesses transfer risks for business assets and entities that are at high risk of economic losses and costs from earthquakes and hurricanes.”

Chance Gilliland, Head of Global Property Delegated Authorities at Chaucer, added, “Chaucer is excited to be partnering with K2 Parametric to provide hurricane and earthquake cover to the US market. K2 Insurance, through Scott and his team, have the knowledge and expertise to help bridge the insurance gap for these underserved customer segments.

“As risks posed by natural perils become more severe, the need for parametric insurance products is becoming more pronounced. Chaucer is delighted to be expanding its presence in this fast-growing and innovative area of the market. We believe our partnership with K2 Parametric complements our ability to offer catastrophe cover through more traditional products.”