Reinsurance broker Augment Risk has announced the launch of its Global Parametric Specialty division, led by newly appointed Kurt Cripps.
The new unit will be focused on “client-tailored parametric reinsurance products designed to provide a surgical approach to managing CAT exposures.”
Augment Risk said its parametric placements are designed to enhance the traditional client operating model through a “fast and currently unrivalled” claims recovery process, bringing a new option to clients in the wake of challenging property cat reinsurance market conditions.
“Augment Risk’s Global Parametric Specialty is dedicated to promoting and implementing tailored index-based risk transfer solutions to clients across the globe,” the firm explained.
Commenting on the new role, Cripps said, “I’m excited to be joining such a progressive organization as Augment Risk, especially at a time when the reinsurance industry is undergoing this profound change.
“We want to focus on the benefit that a parametric product can bring to our clients; a highly efficient claims recovery process, improving opportunity costs and a much greater transparency around reinsurance efficiency. Add to this the very real threat associated with climate change, and the need for finding new and more effective solutions has never been more acute.”
Cripps continued, “Fundamentally with reinsurance costs rising, higher deductibles, reduced limits, and self-insured retention increasing, clients are having to manage a far greater degree of risk.
“Parametric coverage has never been a more viable and affordable alternative, whilst also providing clients the comfort that risks are managed in the most efficient and cost-effective way. The traditional way of managing risk isn’t as available or sustainable anymore, so now is the time to do something different.
“By improving reinsurance purchasing efficiency in this way, we can remove threats associated with loss creep, secondary perils, extensive settlement periods, fraud and in worst case scenarios, arbitration/litigation so often seen in the traditional market.
“This creates huge security and value to a client’s risk management strategy by giving them back the value of time and most importantly their capital.”
Augment Risk was established in July this year, backed with up to $100 million in funding from private equity firm Altamont Capital Partners.
Augment Risk noted that its Parametric Specialty division will initially focus on assisting Captives, Insurers, Reinsurers and ILS firms manage their global exposures to Natural Perils (Windstorm, Earthquake & Wildfire), with the ambition to significantly impact the proportion of catastrophe premium currently in the market by moving to index-based solutions and complementing a client’s current buying dynamic.