North America remains the focus of parametric premium growth

By Henry Gale

May 1 - (The Insurer) - The adoption of parametric coverage is growing fastest in North America, the region where it is already most widely used, according to a survey of senior market participants conducted by Parametric Insurer.

Most of the survey's respondents, which included the leaders of parametric units at several of the sector's largest (re)insurers and brokers, said that premium volume for parametric covers had grown in the U.S. and Canada between 2023 and 2024 in their experience. One in four respondents believed the parametric market had grown by at least 25% over that period.

An analysis of market participants' rankings of regions by premium volume showed the U.S. and Canada represented the largest portion of the parametric market in 2024. Second was Central America and the Caribbean, a region where a majority of respondents also saw premium growth between 2023 and 2024.

In South America, Europe and Asia, a narrow majority observed growth but many market participants felt there was little or no change in premium volume. There was a strong correlation between the regions respondents ranked as having the greatest premium volume and those that saw the most growth between 2023 and 2024.

Market participants who specialised in property catastrophe-related perils such as tropical cyclone and earthquake ranked South America and Asia higher than Europe for 2024 premium volume and year-on-year growth, while those who work on weather-related transactions saw more traction for parametric solutions in Europe.