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Urs Ramseier, Chief Executive Officer of insurance-linked securities (ILS) manager Twelve Securis, expects significant growth in the parametric ILS market as technological advances enhance data quality, modelling, and trigger precision, creating new opportunities for business interruption coverage and protection where traditional insurance and reinsurance solutions are lacking.

At the Artemis ILS NYC 2025 conference, AM Best spoke with Ramseier about the current state of the parametric ILS marketplace.

He explained that parametric ILS has primarily been part of the catastrophe bond space, including those issued by the World Bank. However, a growing number of private parametric ILS transactions are now entering the market, which Ramseier views as a positive development offering new opportunities for investors.

Ramseier highlighted the advantages of parametric ILS structures over traditional ones.

“Parametric is clear in terms of trigger,” said Ramseier. “There is no risk of trapped collateral, and this means that internal rate of returns are superior to indemnity transactions, because you don’t have the dilution of the risk premium when the collateral is trapped, you have certainty on the liquidity.”

He added, “So basically, we can offer higher liquidity terms for our investors on the fund level, and you don’t have side pockets on commingled ILS funds.”

Ramseier also emphasised the role of technology in driving the growth of parametric ILS.

“I think technology is the key driver behind it. More power to compute these models, better data—this is really the driver of parametric development in insurance, reinsurance, and also the ILS space,” he noted.

He addressed a common misconception that parametric structures carry significant basis risk—the gap between an event occurring and a payout being triggered—explaining that technological advancements are helping to minimise this.

“A lot of people think there is a lot of basis risk for the buyer of ILS solutions, but I think with this technology, we can reduce or mitigate the basis risk a lot. Getting the trigger closer to the exposure is a development that has only become possible due to this better technology we have,” said Ramseier.

Looking ahead, Ramseier anticipates massive growth in the parametric space, opening up new demand for business interruption coverage and protection in areas where traditional insurance and reinsurance markets currently lack solutions.

The full AM Best interview with Twelve Securis’ CEO at Artemis ILS NYC 2025 is embedded below.



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Technology to drive growth in parametric ILS market: Ramseier, Twelve Securis was published by: www.Artemis.bm
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