Excessweather, a Lloyd’s broker that specialises in parametric products, has seen demand for its products and expertise surge thanks to a combination of new technology enabling the use of such solutions and a greater awareness of the possibilities globally.

John Warwick, Excessweather chief executive officer, who left ILS Capital Management earlier this year to focus on the venture, told Monte Carlo Today that it is seeing ever-more innovative products and solutions, many of which have the potential to change people’s lives.

“Advances in satellite imagery and the way in which historic scenarios can be recreated has been game-changing for the parametric space,” he said. “We are seeing a lot more demand as a result.”

Excessweather typically receives raw submissions on potential deals from brokers. It then models them, adds datasets and factors in historical information before developing a proposition that is easy understood by brokers and carriers and which they have confidence in.

“We produce it in a format the market can respond to,” Warwick explained.

Excessweather works with about 15 brokers on these submissions. The carriers most open to taking this type of business include Swiss Re, NewRe, Descartes Parametric Insurance and a handful of Lloyd’s syndicates.

The firm has entered into a co-broking arrangement with BMS, whereby BMS generates opportunities and partners with Excessweather on parametric opportunities from around the world.

Warwick cites some innovative examples of parametric deals Excessweather has worked on. One UK pub chain has a parametric insurance contract in place triggered by excess rainfall in the summer, which would hit profits. A UK insurer has devised a policy triggered by temperature, something it conceived after the big freeze in 2018 triggered heavy claims stemming from burst pipes.

“Any scenario where there is an ultimate loss of profits could benefit from this,” he said. “It could be crops, retail, renewable energy—the list is endless. We can do any form of deductibles as a client wants.”

The meteorological events Excessweather is able to model include rain, sun, river levels and hail. It can also construct products around earthquake risk. The innovation possible in the contracts is endless, he said.

“A client can have a contract for any length and even switch between perils: rainfall at one part of the year and sun in another,” he concluded.