Parametric insuranceA different way to transfer risk.
Instead of assessing a physical loss after the fact, parametric insurance pays out against an independent, predefined parameter — removing ambiguity from the claims process and accelerating settlement.
Side by side
Physical loss vs. predefined parameter.
Same event, two claims processes. But one pays faster.
Traditional insurance
Payout reflects the assessed value of the physical loss, once verified.
Parametric insurance
Payout is a predefined amount, released once the independent parameter reaches the agreed trigger.
How a trigger works
The trigger decides when it pays.
An illustrative rainfall cover for a cereal farm, over 20 growing seasons. Most seasons are normal; three severe droughts do almost all the damage, and that is exactly the risk the cover takes off the balance sheet.
2023 season · rainfall 29% of average
Illustrative model, not a quote. 20 synthetic seasons. The farm loses 1% of its harvest revenue for every point of rainfall below 80% of the average; the cover pays that same 1% for every point below the trigger, so the loss between 80% and the trigger stays with the farm, like a deductible. Premium = average historical payout + a 30% loading for costs and capital. Real terms are priced on your location's data.
Why it matters
What changes for your balance sheet.
Cash when you need it
The payout lands while the loss is still unfolding, so you can pay suppliers, staff or lenders instead of waiting for a claim to close.
No dispute on the amount
Both parties agree the index, the trigger and the payout scale before cover starts: the data decides, not a negotiation.
Covers what indemnity can't
Revenue losses with no physical damage, exclusions and high deductibles: it sits alongside your existing policies.
Being transparent
Basis risk: when the index and your loss don't match.
The payout follows the index, not your actual loss, so the two can drift apart in both directions. Some years you lose more than the index pays; other years it pays more than you lost. We narrow both gaps by choosing an index that tracks your exposure and back-testing the trigger on your location before you commit.
How we back-test a trigger →Ten illustrative years · actual loss vs index payout
- Under-payout · year 3A real loss, but the index stayed above the trigger: the gap stays with you.
- Over-payout · year 7The index crossed the trigger while your loss was small: you are paid more than you lost.
Who it's for
If your revenue depends on something measurable, it can be parametrised.
Questions buyers ask
Before you commit.
How fast is the payout?
Once the independent data source confirms the trigger has been reached, the predefined payout is released — there is no loss adjustment. That typically means days to weeks, rather than the months an indemnity claim can take.
Where does the data come from, and can it be manipulated?
Triggers are based on independent sources agreed in the contract — satellite and reanalysis datasets, meteorological agencies, seismic networks, public-health authorities. Neither you nor the insurer controls the index, which is what makes settlement objective.
How is the price determined?
From the historical frequency and severity of the index at your location, the trigger level and payout you choose, plus standard loadings. You receive indicative pricing before anything is bound.
Does it replace my existing insurance?
No. Parametric cover is designed to sit alongside indemnity insurance — covering losses without physical damage, filling exclusions, or providing fast liquidity while a traditional claim is processed.
Do I need a broker?
Helios Re distributes through brokers. If you already work with one, we structure the cover with them; if not, contact us and we will point you to one of our broking partners.
Next step
Parametric structuring, applied to your exposure.
We back-test a trigger on your location and come back with indicative terms.