Earthquant

𝗧𝗼𝗸𝗲𝗻𝗶𝘀𝗮𝘁𝗶𝗼𝗻 𝗰𝗼𝘂𝗹𝗱 𝗯𝗲 𝘁𝗵𝗲 𝗺𝗶𝘀𝘀𝗶𝗻𝗴 𝗯𝗿𝗶𝗱𝗴𝗲 𝗯𝗲𝘁𝘄𝗲𝗲𝗻 𝗽𝗮𝗿𝗮𝗺𝗲𝘁𝗿𝗶𝗰 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗴𝗹𝗼𝗯𝗮𝗹 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 What if catastrophe risk could be divided into investable digital units and payouts executed automatically when a predefined event occurs? That is the promise emerging at the intersection of tokenisation, parametric insurance and alternative risk transfer. In simple terms, tokenisation converts ownership in a real-world asset or financial contract into digital tokens recorded on a blockchain. In reinsurance, each token can represent a fractional participation in a collateralised risk pool, giving investors exposure to insurance risk without entering a conventional reinsurance transaction directly. This is no longer purely conceptual. Recent transactions have introduced blockchain based tokenised securities linked to catastrophe reinsurance programmes. Completed tokenised reinsurance tranches further show that the model is beginning to move beyond experimentation into real-world deployment. Parametric insurance is poised to make this structure even more powerful. A tokenised risk pool can be connected to an independently measured trigger, such as wind speed, earthquake intensity or rainfall. An oracle brings this real-world data onto the blockchain. If the agreed threshold is crossed, the smart contract can calculate the loss to investors and release the payout automatically. For the ART market, the potential is significant. Smaller investment denominations, access to new capital, lower administration and settlement costs, transparent collateral, more granular risk tranches and eventually greater secondary-market liquidity. For insurers and reinsurers, it could create faster and more flexible capacity, particularly for risks that struggle to attract conventional capital. Tokenisation with parametric insurance does not eliminate basis risk. Nor does code remove the need for trusted data. But it could fundamentally change how risk is packaged, funded and settled. Parametric insurance makes risk measurable. Tokenisation could make that risk more investable. #ParametricInsurance #Tokenisation #Reinsurance #ART #ILS #InsurTech #AlternativeCapital #Earthquant Insurance-Linked Securities (ILS) education programme India Insurtech Association

Thank you, India Insurtech Association, for the warm welcome! We're excited to be part of the IIA ecosystem and look forward to collaborating with industry pioneers to accelerate digital transformation and advance climate intelligence for the insurance sector. Here's to driving the future of insurance innovation in India, together.

Thank you, India Insurtech Association, for the warm welcome! We're excited to be part of the IIA ecosystem and look forward to collaborating with industry pioneers to accelerate digital transformation and advance climate intelligence for the insurance sector. Here's to driving the future of insurance innovation in India, together.

Could Parametric Insurance be the future of Lloyd's London Bridge? The launch of London Bridge, Lloyd's insurance-linked securities (ILS) platform, marks another important step in the convergence of insurance and capital markets. Designed to simplify access to third-party capital through catastrophe bonds, collateralized reinsurance and other risk transformation structures, London Bridge is fundamentally about making insurance risk more investable. At first glance, London Bridge and parametric insurance appear to belong to different conversations. One is a capital market platform; the other is an insurance product. Yet, when viewed through the lens of investors rather than insurers, they become remarkably complementary. Institutional investors seek risks that are transparent, measurable and capable of being modelled with confidence. Traditional indemnity structures often introduce uncertainty through claims adjustment, reserve development, litigation risk and prolonged settlement timelines. These factors can make both pricing and capital deployment more complex. Parametric insurance approaches the problem differently. Instead of indemnifying the actual financial loss, payouts are linked to an independently verifiable event. Once the agreed trigger is exceeded, the payout follows automatically. There is no loss adjustment process and no uncertainty around the payout methodology. For capital market investors, this creates several advantages: - Clearly defined and objective trigger events - Greater transparency in modelling expected losses - Faster capital settlement after an event - Reduced reserve uncertainty These characteristics align closely with the objectives of platforms like London Bridge, whose purpose is to connect insurance risk with institutional capital in an efficient and scalable manner. Parametric insurance addresses this need. London Bridge provides an efficient route for institutional capital to support such structures. Together, they represent two complementary pieces of a broader transformation in risk transfer. As climate risk continues to evolve into a mainstream financial risk, the future of insurance may not simply be about transferring losses. It may be about creating investment grade risk structures where objective data, rapid capital deployment and investor confidence become the defining characteristics of the next generation of risk transfer. At Earthquant, we are exploring how science-led parametric analytics can help bridge insurance innovation with the evolving world of alternative risk transfer. #AlternativeRiskTransfer #ART #InsuranceLinkedSecurities #ILS #ParametricInsurance #CapitalMarkets #ClimateRisk #Earthquant Insurance-Linked Securities (ILS) education programme

𝗕𝗮𝗻𝗴𝗹𝗮𝗱𝗲𝘀𝗵’𝘀 𝗻𝗲𝘄 𝗳𝗹𝗼𝗼𝗱 𝗿𝗶𝘀𝗸 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝘀𝗰𝗵𝗲𝗺𝗲: 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝗳𝗹𝗼𝗼𝗱 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲, 𝗯𝘂𝘁 𝗮 𝗽𝗿𝗲-𝗱𝗲𝘀𝗶𝗴𝗻𝗲𝗱 𝗱𝗶𝘀𝗮𝘀𝘁𝗲𝗿 𝗹𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆. Bangladesh’s new flood risk financing scheme is an important signal for the parametric insurance market. 𝗪𝗵𝗮𝘁 𝗵𝗮𝘀 𝗯𝗲𝗲𝗻 𝗱𝗼𝗻𝗲? Bangladesh has operationalised a flood risk financing structure covering over 100,000 households across Gaibandha, Kurigram and Sirajganj along the Jamuna River. The programme combines a sovereign parametric flood insurance policy with a community protection fund. 𝗪𝗵𝘆 𝗱𝗼𝗲𝘀 𝗶𝘁 𝗺𝗮𝘁𝘁𝗲𝗿? Flood response usually suffers from delay- assessment, verification, approval and disbursement. A parametric structure changes the sequence. Once predefined flood conditions are met, liquidity can move faster to the affected population. 𝗛𝗼𝘄 𝗶𝘀 𝗶𝘁 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝗱? The policy uses water-level and flood-extent triggers, while the community fund addresses more frequent events and basis risk, including lower-threshold flood events and cumulative rainfall triggers. This layered design is the real differentiation: one instrument for severe events, another for smaller or imperfectly captured events. The use of both water-level and flood-extent triggers is significant because it reduces basis risk by linking payout to flood severity as well as actual inundation spread. At Earthquant, this is exactly the direction we believe climate risk transfer must take: data-led structures where hazard, exposure, trigger logic, payout design and basis risk are modelled transparently. Our work is focused on making such structures faster to design, easier to explain and commercially usable for insurers, brokers, lenders and climate-exposed sectors. Global Shield against Climate Risks Disaster Risk Financing and Insurance Program Sadharan Bima Corporation #ParametricInsurance #ClimateRisk #FloodRisk #DisasterRiskFinancing #ClimateResilience #Earthquant

𝗧𝗵𝗲 𝗗𝗼𝗺𝗶𝗻𝗶𝗰𝗮𝗻 𝗥𝗲𝗽𝘂𝗯𝗹𝗶𝗰 𝗶𝘀 𝗿𝗲𝘄𝗿𝗶𝘁𝗶𝗻𝗴 𝘁𝗵𝗲 𝗿𝗼𝗹𝗲 𝗼𝗳 𝗽𝗮𝗿𝗮𝗺𝗲𝘁𝗿𝗶𝗰 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 Climate disasters are no longer measured only by infrastructure damage, but by how quickly vulnerable households receive financial support. That is why the Dominican Republic's recent announcement matters. Not for introducing another parametric insurance product, but for redefining its role in government response. Many headlines describe this as "the world's first parametric insurance integrated into a social protection system" when the reality is slightly more nuanced. Several countries have already connected parametric insurance with social protection. Through initiatives involving the World Food Programme and CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility), countries like Belize, Dominica and Saint Lucia have used sovereign parametric insurance to strengthen post-disaster cash transfer programmes in which governments receive the sovereign insurance payout and allocate a predefined share to expand or top up social protection benefits after major climate events. The Dominican Republic takes this one step further. Rather than treating insurance as a government financing tool, it embeds it directly within the operational architecture of an adaptive social protection programme - the Superate conditional cash transfer programme. When predefined rainfall or wind thresholds are exceeded, independently verified weather and satellite data trigger rapid payouts to eligible vulnerable households without lengthy damage assessments. That distinction matters. It transforms parametric insurance from a sovereign liquidity tool into an integral part of public welfare delivery. In practice, the model combines four elements into a single system: • An existing government social protection database identifying vulnerable households. • Objective climate triggers based on independently verified weather data. • Automatic insurance payouts triggered without loss adjustment. • Government payment systems that rapidly deliver assistance. This shortens the path between a climate event and financial relief. Parametric insurance is praised for rapid payouts, but payouts alone do not ensure rapid recovery. Funds still require efficient delivery mechanisms to reach affected communities. The Dominican Republic addresses this missing link. It shows that innovation in climate risk finance is no longer limited to better hazard models or trigger design, but increasingly lies in integrating insurance with existing public social protection systems. At Earthquant, such developments reinforce our belief that the future of parametric insurance lies not only in better risk models, but in building digital tools that make climate risk assessment faster, transparent and operationally scalable. #ParametricInsurance  #ClimateRisk  #ClimateResilience  #DisasterRiskFinance #SocialProtection  #AdaptiveSocialProtection #ClimateFinance

𝗖𝗮𝘁 𝗕𝗼𝗻𝗱𝘀, 𝗜𝗟𝗦, 𝗮𝗻𝗱 𝗣𝗮𝗿𝗮𝗺𝗲𝘁𝗿𝗶𝗰 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲: 𝗧𝗵𝗲 𝗿𝗶𝘀𝗸 𝘁𝗿𝗮𝗻𝘀𝗳𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁 𝗶𝘀 𝗰𝗵𝗮𝗻𝗴𝗶𝗻𝗴 𝘀𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁𝗹𝘆 The global catastrophe bond and insurance-linked securities market is no longer just a specialist reinsurance segment. It is increasingly becoming part of how governments, insurers and institutions think about financial resilience. A recent example is Morocco - The World Bank has approved a new $400 million Morocco Climate & Risk Finance Program to strengthen the country’s financial resilience against climate, disaster and cyber risks. The program aims to mobilise private capital, put in place pre-arranged disaster financing and develop insurance and risk transfer instruments as part of Morocco’s wider resilience architecture. According Artemis, a potential catastrophe bond is now one of the instruments being considered under this program alongside other forms of insurance risk transfer, including structures with parametric triggers. Catastrophe bonds have historically been used mainly for peak natural catastrophe risks such as hurricanes and earthquakes. That is still the core of the market. But the direction of travel is clear: the market is expanding across new geographies, new sponsors, new perils and more refined structures using parametric indices. 𝗧𝗵𝗶𝘀 𝗶𝘀 𝘄𝗵𝗲𝗿𝗲 𝗽𝗮𝗿𝗮𝗺𝗲𝘁𝗿𝗶𝗰 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗶𝘀 𝗯𝗲𝗰𝗼𝗺𝗶𝗻𝗴 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗶𝗻𝗴𝗹𝘆 𝗿𝗲𝗹𝗲𝘃𝗮𝗻𝘁. Parametric structures do not wait for a traditional loss assessment. They pay when a pre-agreed event parameter is met. For sovereigns and public entities, this can be extremely valuable. After a major catastrophe, the first requirement is often liquidity: funding for emergency response, relief, continuity of essential services and early recovery. A well-designed parametric structure can create faster access to funds when timing matters most. The Morocco development therefore fits into a clear global pattern: climate and disaster risk financing is moving towards more pre-arranged, transparent and capital-market-linked structures. For the ILS market, this is extremely important. Parametric structures can help investors understand the risk more objectively. Clear triggers, defined event parameters, independent data sources and transparent modelling can make risks more investable, especially in emerging markets where traditional exposure and claims data may be limited. 𝗣𝗮𝗿𝗮𝗺𝗲𝘁𝗿𝗶𝗰 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗶𝘀 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝗮 𝗽𝗿𝗼𝗱𝘂𝗰𝘁 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝘄𝗶𝘁𝗵𝗶𝗻 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲, 𝗶𝘁 𝗶𝘀 𝗯𝗲𝗰𝗼𝗺𝗶𝗻𝗴 𝗼𝗻𝗲 𝗼𝗳 𝘁𝗵𝗲 𝗱𝗲𝘀𝗶𝗴𝗻 𝗹𝗮𝗻𝗴𝘂𝗮𝗴𝗲𝘀 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘄𝗵𝗶𝗰𝗵 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗶𝘀 𝗯𝗲𝗶𝗻𝗴 𝘁𝗿𝗮𝗻𝘀𝗹𝗮𝘁𝗲𝗱 𝗶𝗻𝘁𝗼 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗺𝗮𝗿𝗸𝗲𝘁 𝗶𝗻𝘀𝘁𝗿𝘂𝗺𝗲𝗻𝘁𝘀. #ParametricInsurance #CatBonds #ILS #ClimateRisk #DisasterRiskFinance #RiskTransfer #Reinsurance #ClimateResilience #InsuranceInnovation #CapitalMarkets

𝗧𝗵𝗲 𝗲𝗻𝗲𝗿𝗴𝘆 𝘁𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 𝗶𝘀 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝗮𝗯𝗼𝘂𝘁 𝗮𝗱𝗱𝗶𝗻𝗴 𝗿𝗲𝗻𝗲𝘄𝗮𝗯𝗹𝗲 𝗰𝗮𝗽𝗮𝗰𝗶𝘁𝘆 𝗮𝗻𝘆𝗺𝗼𝗿𝗲, 𝗯𝘂𝘁 𝗶𝘁 𝗶𝘀 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗶𝗻𝗴𝗹𝘆 𝗮𝗯𝗼𝘂𝘁 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗮𝗻𝗱 𝗺𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝗮 𝗿𝗮𝗽𝗶𝗱𝗹𝘆 𝗲𝘃𝗼𝗹𝘃𝗶𝗻𝗴 𝗿𝗶𝘀𝗸 𝗹𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲. We were delighted to see our director, 𝗗𝗿. Ram Ratan, PhD, participate in the panel discussion on “𝗣𝗿𝗶𝗰𝗶𝗻𝗴 𝘁𝗵𝗲 𝗨𝗻𝗽𝗿𝗲𝗱𝗶𝗰𝘁𝗮𝗯𝗹𝗲: 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗩𝗼𝗹𝗮𝘁𝗶𝗹𝗶𝘁𝘆 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗙𝘂𝘁𝘂𝗿𝗲 𝗼𝗳 𝗥𝗲𝗻𝗲𝘄𝗮𝗯𝗹𝗲 𝗘𝗻𝗲𝗿𝗴𝘆 𝗥𝗶𝘀𝗸 & 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲” hosted by Gallagher India. The discussion brought together industry leaders and experts to explore how climate volatility is reshaping renewable energy performance, investment decisions, risk management strategies, and insurance solutions. Dr. Ram shared insights on:   • The impact of changing monsoon patterns and climate variability on renewable energy generation  • Why historical weather averages alone are becoming insufficient for energy forecasting and investment decisions  • The growing need for climate-adjusted forecasting and forward-looking risk analytics  • How insurers, lenders, investors, and renewable energy developers can better quantify and manage climate-driven uncertainty It was encouraging to see such thoughtful conversations around the intersection of climate science, renewable energy, risk management, insurance, and emerging technologies. A sincere thank you to Gallagher India for organizing a highly engaging and insightful event and for creating a platform that brought together diverse perspectives on some of the most critical challenges facing the energy sector today. We at Earthquant look forward to continuing these important conversations and collaborating with industry stakeholders to build more resilient and climate-informed risk solutions. AJIT HORRA Anirudh Singh Ishita Gogia SUNNY GOEL Puneet Gehani Mayank Sharma Pawan Poona Ishani Doshi Prateek Aggarwal Ritesh Singhi anjali mirchandani Samdarshi Vikram Singh #Earthquant #GallagherIndia #RenewableEnergy #ClimateRisk #EnergyStorage #RiskManagement #ParametricInsurance #ClimateAnalytics #WeatherRisk #EnergyTransition #InsuranceInnovation

Thank you, Gallagher India, for the feature. We look forward to contributing to the discussion on climate volatility, its impact on renewable energy sector and the adaptation solutions for all the stakeholders.

Rescale Factor in parametric insurance: Why is it debated and why it matters? In parametric insurance for lack of solar or wind, rescale factor is widely debated. Firstly, it sounds technical. Secondly, it often feels uncomfortable to brokers and clients. Finally, in many cases, first instinct is to ask: why not remove it? That reaction is understandable but the rescale factor exists for a scientific reason as elaborated below. What is the rescale factor? In simple terms, it is the ratio between: the client’s own annual expected production (AEP; P50), and the annual expected generation derived from the reanalysis dataset (ERA5 or MERRA2) So if the client’s plant, based on its own operating profile, produces a different long-term annual expected energy than generation implied by the agreed, third-party data, the structure applies rescaling. Why does this become a point of debate? Because from the client’s perspective, the rescale factor feels like an adjustment sitting between the agreed strike and payout. Why is the rescale factor applied? Because the underlying parametric cover is usually not triggered by the plant’s actual generation. It is triggered by an external index, built using weather data such as ERA5 or MERRA2 and an agreed conversion methodology. As a result, the index estimated from 3rd party data will differ from the client’s declared generation. If that gap is ignored, the structure may become distorted in either direction. What problem does the rescale factor actually solve? It helps ensure that the payout framework is calibrated to the economic reality of the insured project, while still using an objective, externally verifiable index. Without such calibration, two problems can arise. 1. The cover would systematically overpay or underpay 2. The structure would pick up differences unrelated to weather shortfall The rescale factor helps separate weather index calibration from project-specific operational reality. In that sense, it is not just a tool for pricing the parametric insurance, rather, it acts as a boundary-setting instrument. If the rescale factor is presented as a mysterious technical term, it will naturally attract resistance. But if it is explained correctly, it is easier to understand. Conclusion Rescale Factor becomes controversial because it is easy to misunderstand and hard to explain in a simple sentence. But its purpose is legitimate i.e. to reduce structural mismatch between reanalysis-derived generation and the client’s agreed annual generation. At Earthquant, our parametric platform has an inbuilt and transparent methodology for applying the rescale factor so that the structure remains both technically robust and commercially relevant. This helps bridge the gap between raw reanalysis output and project-specific generation economics. Reach out to us for a demo. #Parametric #Insurance #RenewableEnergy #SolarEnergy #WindEnergy #ClimateRisk #Underwriting #WeatherRisk #Reinsurance #Earthquant