Parametrix, the company that launched as a specialist in parametric cloud downtime cyber insurance and reinsurance protection, has expanded its range of parametric cyber related insurance offerings, launching a new product focused on digital system interruptions and technology performance guarantees.
With $50 million of limits available backed by capacity from the Lloyd’s market, this is a meaningful new addition to Parametrix’s offering.
Business interruption caused by digital system issues and impacts is a significant cost for large companies and enterprises, so this new parametric cyber insurance offering, named Parametrix Enterprise Solutions, can help to cover some of these costs.
The parametric policies are designed specifically to address digital interruptions, with internal and external IT systems insured under a single cover to enhance system performance protection, support commercial objectives, and effectively address key risk requirements, Parametrix explained.
Underwritten by syndicates at Lloyd’s of London, the product uses clear and flexible parametric triggers with guaranteed reimbursement.
Every policy is customised to meet a client’s specific needs, covering both first-party systems and dependent systems like cloud services, payment gateways, customer relationship management (CRM) systems, and others.
Interestingly, Parametrix says that coverage can be tailored to provide an alternative to performance or SLA guarantees, which is a great use-case as everyone using IT systems today will know that SLA promises are rarely kept, or at least experienced by system users.
Providing two potential use-cases, Parametrix explained, “A private cloud infrastructure provider could use the coverage to back its performance promises, enabling them to release collateral funds and reduce loan and funding costs by up to 60%. A SaaS company could offer their clients SLAs that are backed by the parametric policy, which not only guarantee service reliability, but also strengthen the company’s competitive advantage in the market.”
“Listening to the needs of our enterprise clients and broker partners has always been at the core of our innovation and growth,” said Jonathan Hatzor, CEO of Parametrix Insurance.
“As the global leader in cloud outage insurance, we understand the critical impact digital system interruptions have on businesses. That’s why we’ve developed cutting-edge, parametric insurance solutions tailored to meet the specific demands of enterprises. Our solutions not only empower companies to enhance their customer service, but also provide financial advantages, such as collateral relief and funding cost reductions, resulting in a stronger market position and improved performance.”
Digital interruption, software and systems outages can drive significant costs for global businesses and it’s an area with growing coverage needs.
It’s also interesting to consider how a product like this could scale up to be used by carriers as a type of cyber reinsurance or retrocession as well, given they may have exposure to interruption risks through their standard cyber books of business.
As our readers will be aware, Hannover Re sponsored a $13.75 million Cumulus Re (Series 2024-1) parametric cloud outage catastrophe bond earlier this year, with modelling of the cyber risks undertaken by Parametrix.
It would be very interesting to see a cyber interruption bond come to market in future, as demand for protection against IT outages and interruption increases across the globe.
