INFUSE Recap: How Parametric Insurance can help close the protection gap

Parametric insurance can help close the protection gap by extending cover to more measurable risks. Paired with indemnity coverage, trigger-based payouts can give businesses funds to begin recovery before a traditional claim is resolved.

That was the through-line of a recent INFUSE webinar hosted by Send and moderated by Tony Tarquini. Panelists Ellen Gyandzhuntseva of Munich Re Specialty, Ola Jacob of Global Parametrics, and Alice Glenister, Head of Parametric Solutions at Miller, discussed how data and technology are expanding parametric insurance’s potential, and how hybrid models can address protection and timing gaps.

Bad Data In, Bad Decisions Faster

The clearest illustration was data. Sladjana argued that most of the friction in broker-carrier workflows starts upstream, with inconsistent submissions: a 50-page PDF formatted differently every week forces someone to manually hunt for data points, and errors follow from there.

Her fix is what she calls a submission API: a digital bridge that filters structured data, unstructured documents, and compliance rules before anything reaches a human — much like a bouncer checking not just your ID, but whether you're actually on the list.

As she put it: “We have to focus on data. If you put the rubbish data in, you're just making bad decisions faster.”

Only once that foundation is solid does AI add real value through sanctions checks, business rule validation, and submission triage rather than being bolted onto messy data and producing faster bad decisions.

Parametric Insurance is Moving Beyond its Traditional Niche

Parametric insurance pairs a predefined payout with a defined, independently measurable event. The payout is triggered by that event rather than calculated from the policyholder’s actual loss.

The market’s conversation is shifting from defining parametric insurance to asking where it can create value. As Alice Glenister observed, its applications now reach beyond familiar catastrophe perils. The panel discussed risks such as cloud downtime, cargo delays, and construction weather, exposures that may be addressed through a measurable trigger and a payout designed around a specific need.

A heatwave cover in Japan offered a vivid example. Ola described a policy that pays the government when temperatures reach 36 degress or higher for three consecutive days. The funds can then support heatwave response packages for residents. The trigger is the temperature threshold, rather than proof of each resident’s individual loss.

Better Data and Technology are Helping Parametric Insurance Scale

Parametric cover becomes more practical when triggers are trusted, precise enough to reflect conditions at the insured location, and affordable to administer. Ellen grouped the changes making parametric more scalable into three areas: trust, precision, and cost.

Satellite observations, dense weather networks, live tracking feeds, and IoT sensors can provide data that both parties can verify. More granular sources, including sensors that measure flood depth or earthquake shaking at a specific asset, can help triggers reflect what happened at the insured location.

This matters because of basis risk: the possibility that a trigger does not match the insured’s actual experience, leaving a loss without a payout or producing a payout that does not align with the loss. Better data can help reduce that gap.

The panel also noted that data is becoming more available and affordable. API connectivity could integrate parametric cover into a customer’s existing ecosystem, from placement through payout. That may reduce administrative work and make some solutions more accessible to smaller businesses and communities.

Hybrid Cover Can Provide Funds When Recovery Starts

A parametric payout can provide funds for urgent recovery before an indemnity claim is fully assessed. Ola illustrated the potential with a scenario involving a telecoms provider on an island hit by a Category 4 hurricane. As the company worked to restore communications, it also needed to gather evidence and receipts for its traditional insurance claim.

With a parametric layer triggered by the hurricane, the company could receive funds within days to begin repairs. That early liquidity could help restore service sooner and reduce the eventual business interruption loss, while the indemnity claim proceeds through its assessment.

The two forms of cover serve different purposes: parametric insurance pays a predefined amount when its agreed trigger is met; indemnity insurance responds to covered actual loss under the policy. Together, they can address different parts of the same risk.

Where Could Parametric Cover Create Value?

The webinar’s examples point to a broader opportunity: identify where a measurable event and a predefined payout could address a specific protection or timing gap. Better data is making more risks measurable, while hybrid structures can connect those triggers to the funds businesses need to act.

Watch the full webinar here.