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Parametric climate triggers aim to speed payouts during El Niño
CelsiusPro CEO Mark Rueegg said parametric pricing and payout are transparent once trigger thresholds tied to local conditions are met.
Climate risk is rising as the probability of a Super El Niño event increases, and parametric insurance is being positioned as a way to bring more granularity and certainty to coverage, according to an interview with CelsiusPro CEO Mark Rueegg by Artemis.
Rueegg said triggers in parametric policies are adjusted to local climate conditions where the contract is deployed, with the payout tied directly to whether the trigger is met. He added that the approach uses historical data from prior El Niño years to help set triggers, while emphasizing that parametric insurance is transparent in both pricing and payout.
Artemis reported Rueegg also described how fast settlement can help corporate risk managers and smaller policyholders hedge cash flow after adverse climate events. He said the design is meant to provide a first layer of insurance that pays immediately, without the lengthy loss adjustment process typical of conventional coverage.
Rueegg said CelsiusPro uses satellite imagery to create pixel-level triggers, rather than relying only on broad regional grids, explaining that the grid size can vary from kilometers to hundreds of meters depending on data availability and contract needs.