Andrew Dolphin, director of underwriting the reinsurance division, Hiscox
Parametric solutions are becoming increasingly attractive in the reinsurance space—and having completed its first cyber parametric deal through the AkinovA platform earlier this year, Hiscox is poised to explore further parametric possibilities, Andrew Dolphin, director of underwriting–London, Hiscox Re & ILS, told Intelligent Insurer.
“Parametric feels really relevant at the moment—when you think about complex insurance policies and the appropriateness of wordings, parametric brings simplification to the products,” Dolphin said.
“We think that’s a way for reinsurers to sell business cover to insurers on a parametric basis but also to originate the insurance as well.”
One of Hiscox’s key aims at present is to keep moving forward in the cyber space, with parametric solutions playing a key role.
“We’re a big seller of cyber reinsurance on a non-proportional basis, but with the way cyber reinsurance is constructed at the moment it’s very difficult to see any real diversification in a cyber portfolio,” he said.
“When we think about the reinsurance we are selling, we have to think about aggregating it all in a tail scenario, so any way we can think about diversifying that book would enable us to sell the product more efficiently.
“Parametric is one way we are thinking about that, in terms of selling policies that will only cover a specific peril within cyberspace—for example, selling insurance that would protect from cloud outage only for particular cloud providers.
“It enables you to start to think about diversifying your books, selling pockets of cover and building more capacity into the marketplace, as you don’t have to aggregate every single dollar in a peril scenario.”
Hiscox, AkinovA, Cyber, Parametric Solutions, Insurance, Reinsurance, Andrew Dolphin, UK