By Henry Gale

Feb 7 - (The Insurer) - Weather risk advisory firm Parameter Climate has announced the creation of a Bermuda-based transformer to allow buyers of parametric risk transfer to access more sources of capacity.

Parameter Capital Bermuda Ltd aims to facilitate syndication in the weather risk transfer market beyond traditional (re)insurance capacity, which the firm believes could bring significant market growth.

Transformers convert (re)insurance risks into investible instruments. Parameter Climate says the new vehicle is the first parametric transformer dedicated to connecting industrial buyers of protection with alternative capacity providers.

New York-headquarted Parameter Climate was formed in late 2020, led by Sompo's former head of global weather Martin Malinow as founder and CEO. It secured investment and underwriting capacity from SiriusPoint in 2021, with its management team buying out SiriusPoint's stake in 2023 as the reinsurer divested from MGA equity investments.

Parameter Climate began offering advisory and brokerage services to protection buyers in 2024 and has since advised on the placement of over $100mn of parametric weather transactions. It has also licensed its analytics platform ClimateDelta to organisations such as derivatives broker Evolution Markets.

Its new transformer vehicle will be domiciled in Bermuda, with Parameter Climate crediting "the island's commitment to climate-related risk transfer", and serviced by insurance management firm the Nascent Group.

"With ClimateDelta on the desks of a growing number of market participants, and our advisory and distribution businesses gaining momentum, Parameter Capital is the logical next step as it will facilitate syndication and help protection buyers access a broader ecosystem of capacity providers," Malinow said.

"Most of our vertical-based protection buyers have little experience buying collateralized climate and weather protection, which has limited their choice of counterparties. Parameter Capital aims to become a commonly accepted counterparty for these buyers through which they can access various forms of capacity, thus ensuring they get the most effective execution as they manage these complex risks.

"We set out to build a best-in-class, tech-driven advisory and distribution firm, and we believe that the ‘last mile’ execution services provided by Parameter Capital supported by the cutting-edge analytics on ClimateDelta will further differentiate Parameter Climate from others in the space."