Global specialty (re)insurance group Chaucer has announced that it has partnered with K2 parametric to provide hurricane and earthquake coverage for US mid-sized corporates and municipalities – an area previously underserved by the market.
Chaucer will provide lead capacity for the new parametric product through the London market.
Customers of K2 Parametric can customize their policy to determine the limits and threshold under which a payout is triggered. For example, a hotel that requires hurricane coverage can set the limits to pay out pre-defined amounts for various wind speed thresholds at pre-defined locations.
Speed of payment is one of the key advantages of parametric insurance, Chaucer said. In many cases, claimants receive a payout within a month of the trigger event’s occurrence. Conversely, traditional insurance products may require a long adjustment process.
The partnership with K2 Parametric is the latest parametric initiative from Chaucer, which also provides hurricane coverage for property owners in the Caribbean. Chaucer also co-launched one of the first multi-peril parametric insurance products in Canada.
K2 Parametric is a parametric insurance managing general agent. Led by president Scott Carpinteri, it was established in 2021 as a subsidiary of K2 Insurance Services.
“Chaucer is excited to be partnering with K2 Parametric to provide hurricane and earthquake cover to the US market,” said Chance Gilliland, head of global property delegated authorities at Chaucer. “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 growing 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.”
“It’s a pleasure to be working alongside a carrier of Chaucer’s stature to provide cover for small to mid-size corporates through the Lloyd’s market,” Carpinteri said. “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.”
