New Paradigm Group, LLC, the Florida-based specialist managing general agency that sells parametric insurance and reinsurance products, has received an investment to help it grow its proprietary parametric platform from global reinsurance firm TransRe.
The investment is a clear vote of confidence both in New Paradigm itself, as well as in the potential for parametric insurance and reinsurance use to expand, from TransRe, the reinsurance unit of Alleghany Corporation.
New Paradigm said it will use the proceeds of the investment to help it expand its proprietary parametric data platform, as well as by building-out its in-house structuring, marketing and support teams.
New Paradigm Underwriters created the parametric re/insurance products Hurricane PM™ & Industry Parametric Protection™ (IPP), which utilise proprietary technology and data recorded by hurricane hardened anemometers to offer supplemental insurance coverage products, as well as risk transfer products for reinsurance or retrocession purposes.
The firm has expanded into offering a range of parametric protections, covering risks from hurricane, to flood, earthquake and terrorism risks.
Parametric insurance and reinsurance products enable protection buyers to cover risks that their traditional programs exclude, as well as offering a way to cover difficult to insure risks such as contingent business interruption, hence the sector is expected to grow as more appreciation is gained for the efficient and responsive coverage they offer.
TransRe has clearly seen this potential, making this investment at a time when parametric risk transfer is increasingly high-profile and technology advancements are making it easier for protection buyers to calibrate the coverage to meet their needs.
New Paradigm currently serves protection buyers across three countries, seven U.S. states and one U.S. territory and sees parametric risk transfer growing in popularity due to its ability to address the protection gap and underinsured areas of coverage.
New Paradigm Chairman Brad Meier commented on the investment news, “We appreciate TransRe’s confidence in New Paradigm and look forward to further developing our business together. The global reputation and experience of TransRe and their interest in participating in the development of our business will enhance our ability to remain at the leading edge of structuring parametric transactions that meet the needs of protection buyers.”
Meier has a history of creating successful insurance and risk transfer businesses, having served as Chief Executive Officer and President of Floridian property and casualty specialist Universal Insurance Holdings, Inc. from November 1990 to February 2013. Meier was one of the founders of Universal and during his time there it became one of the top-three leading underwriters of homeowners’ insurance in the state.
New Paradigm President Evan Glassman also said, “Our proprietary data allows us to be at the forefront of the insurtech movement as we structure parametric transactions to meet the unique needs of policyholders and the insurance industry. Our relationship with TransRe will benefit New Paradigm as we expand our in-house team and work with brokers worldwide to help their clients solve problems with the protection gap.”
The backing and investment from global reinsurer TransRe will assist New Paradigm in further developing its range of parametric risk transfer solutions, expanding the global reach of its parametric protection products, designing new solutions to fit within traditional insurance and reinsurance program towers, and will also provide a stamp of approval to the firms innovative offerings.
The capital markets and ILS funds act as capacity providers to back some of New Paradigm’s product range and as its activities expand it will ultimately provide ILS investors with more opportunities to back parametric transfer of risks.