Augment ‘challenges’ traditional market, makes parametric entry with Aon/Inver Re pro
Augment Risk, a fresh reinsurance broker specialising in bespoke solutions for complex risks, has entered the global parametric specialty space with the aim to “challenge” the traditional indemnity and reinsurance market. The company has brought in a former Inver Re and Aon parametric specialist to lead the new practice.
Augment Risk’s new parametric specialty division will initially focus on assisting captives, insurers, reinsurers and ILS firms manage their global exposures to natural perils: windstorm, earthquake & wildfire, with the ambition to significantly impact the proportion of catastrophe premium currently in the market by moving to index-based solutions, complementing clients' current buying dynamic.
Augment was established earlier this year and has placed over $1 billion of premium to the reinsurance market.
Following recent high-profile hires, the company has now tapped former Inver Re and Aon parametrics specialist Kurt Cripps to lead its new practice. Cripps was appointed global head of parametric at Inver Re in January this year. Prior to that, he served as managing director and global head of weather at Aon Reinsurance Solutions, having joined Aon Benfield in 2009. His insurance career began as a broker at HSBC Reinsurance Brokers.
Cripps joins Augment Risk to lead focus on client tailored parametric reinsurance products designed to provide a “surgical approach” to managing CAT exposures. Augment said its parametric placements are designed to enhance the traditional client operating model through a fast and currently unrivalled claims recovery process, bringing a new option to clients in the wake of challenging property cat reinsurance market conditions.
Parametric solutions are increasingly utilized in sophisticated modern day risk transfer and have been offered as a solution to hardening market conditions. According to Allied Market Research, the global parametric insurance market is projected to triple within the decade to an estimated $29.3 billion by 2031.
Cripps said: “I’m excited to be joining such a progressive organization as Augment Risk, especially at a time when the reinsurance industry is undergoing this profound change. We want to focus on the benefit that a parametric product can bring to our clients; a highly efficient claims recovery process, improving opportunity costs and a much greater transparency around reinsurance efficiency. Add to this the very real threat associated with climate change, and the need for finding new and more effective solutions has never been more acute.”
He added: “Fundamentally with reinsurance costs rising, higher deductibles, reduced limits, and self-insured retention increasing, clients are having to manage a far greater degree of risk. Parametric coverage has never been a more viable and affordable alternative, whilst also providing clients the comfort that risks are managed in the most efficient and cost effective way. The traditional way of managing risk isn’t as available or sustainable anymore, so now is the time to do something different.
“By improving reinsurance purchasing efficiency in this way, we can remove threats associated with loss creep, secondary perils, extensive settlement periods, fraud and in worst case scenarios, arbitration/litigation so often seen in the traditional market. This creates huge security and value to a client’s risk management strategy by giving them back the value of time and most importantly their capital.”
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