Slow uptake, but parametric products can be “perfect fit for captives”

• Parametric policies issued by captives rare
• Captives can play role in reducing and absorbing the basis risk of parametric products
• Regulators increasingly comfortable with captive parametric policies

Parametric products are the “perfect fit” for a captive due to their direct access to internal company data, while the policy’s automatic pay-out function also lends well to captive utilisation.

Having the ability for claims to be paid automatically streamlines the claims process and removes the need for large internal or external claims teams.