Parameter Climate: Profitable already, targets growth & new capital partners

Parameter Climate, the parametric risk transfer and climate focused underwriter, has achieved profitability in its first year and now moves forward with an appetite for growth into parametric climate, catastrophe and weather risk transfer, with additional capital sources one avenue that can drive expansion.

Founded by long-standing weather risk transfer industry executive Marty Malinow, Parameter Climate was launched to provide advisory, structured financial products, distribution, and underwriting services to the growing market for climate risk transfer.

Malinow has brought back together many of the senior team he has worked with in various roles through the years, while also sealing a relationship and investment with specialty insurance and reinsurance player SiriusPoint.

Now, the team Malinow has brought together is aiming to build on the profitable platform it has created.

Parameter Climate has delivered a profit for 2022, its first full-year of business, having launched in late 2021.

The company said it has delivered “strong performance in both transaction volume and portfolio returns,” while also increasing its dedicated capacity for 2023, to help it meet new market opportunities.

Further growth in capacity will help Parameter Climate continue to grow and the parametric underwriting specialist is already partnering with dedicated insurance-linked securities (ILS) fund and investors, as well as traditional capacity providers.

Founder and CEO Malinow stated, “We appreciate the support from our capacity partners as well as protection buyers and brokers, many of whom have worked closely with our team for over two decades.

“Our first year confirmed our belief that the further development of the climate market benefits from our unique end-to-end approach of combining data-driven, analytics-informed risk advisory and structuring with experienced distribution and access to significant risk capital. Going forward, we will use these resources to make customized protection available to an expanded number of industries while attracting additional capital sources.

“2022 was an extraordinarily turbulent year for the global economy and broader financial markets, including the climate market. Extreme weather events – including droughts, temperature extremes and volatile wind speed variations – combined with geopolitical events to create difficult conditions for global energy companies, traditionally the most active buyers of climate and weather protection, while crystallizing for other industries the financial and business risks arising from climate trends and extreme weather events.

“Increased public attention to climate volatility is also leading to stronger demands for disclosure from investors and regulators which Parameter Climate believes will drive demand for protection.”

Parameter Climate plans a commercial launch for its proprietary software platform, ClimateDeltaSM in 2023, which the company will put to work in structurng, valuing and administering individual parametric climate transactions and portfolios of parametric risks.

Having its own software will enhance the firms proprietary ability to view, understand and manage risk in parametric form.

“ClimateDelta will make the climate market accessible to a vastly increased number of protection buyers, capacity providers and intermediaries who do not currently have the confidence to commit significant capital based on information derived and stored on spreadsheets,” Malinow explained.

“ClimateDelta is the codification of our unparalleled two plus decades of knowledge and experience, purpose-built to ensure that climate risk is both insurable and investable.”