Parametric insurance pays out based on a predefined index or trigger—such as rainfall, wind speed, or earthquake magnitude—rather than on assessed loss, and is gaining traction in the UK as part of climate resilience and catastrophe solutions. Insurers, reinsurers, and MGAs are developing parametric products for sectors like agriculture, renewable energy, and event cancellation, but must carefully design triggers, manage basis risk, and clearly explain mechanisms to brokers, corporates, and public‑sector buyers.
