PARAMETRIC INSURANCE · ILS · T458 cat-30

Parametric Insurance Trigger Designer & Basis Risk Estimator

Design a parametric insurance or catastrophe bond trigger structure, model the expected annual payout, estimate a premium indication and rate on line, and quantify basis risk: the mismatch between a parametric payout and the sponsor's actual loss experience.

🔒Zero PII
📡No server calls
💻Client-side
📋ILS / Parametric Standards
Parametric Catastrophe Bond ILS Basis Risk Rate on Line Trigger Structure Sovereign Risk
🔒 All inputs are processed locally in your browser. No data is transmitted. Do not enter real personal data — use synthetic or anonymised inputs only.
A: Trigger Type
Determines structural basis risk and settlement speed (see comparison panel)
B: Peril Configuration
Auto-populated by peril
Auto-populated by peril
C: Trigger Structure
Attachment & Exhaustion
Measurement unit auto-labelled by peril
Full payout reached at this level
Payout Function & Limit
Maximum payout per coverage period
Label only: not used in calculation
Annual Frequency (probability of reaching level)
From peril lookup table or user estimate
Probability of reaching full-payout level
D: Basis Risk Inputs
Estimated correlation between trigger metric and actual loss
Default risk premium loading
E: Trigger Structure Diagram

Payout curve maps the measured trigger metric (x) to the payout factor (y). Below attachment: 0%. Above exhaustion: 100%.

F: Probability & Premium Indication
G: Basis Risk Dashboard
H: Trigger Type Comparison
I: Caveats & Limitations
About This Tool
Disclaimer Premium indication is illustrative only. Actual catastrophe bond pricing requires full catastrophe model runs from licensed vendors (AIR, RMS/Moody's, KCC). This tool does not constitute insurance advice or a binding quote.
Parametric / index triggers Payout is driven by a measurable parameter or index rather than the sponsor's verified loss, trading slower settlement for faster cash but introducing basis risk. ILS / Parametric Standards
Basis risk The gap between parametric payout and actual loss. Over-protection: trigger fires but sponsor has no loss. Under-protection: sponsor has loss but trigger does not fire. Clarke et al. 2016 · Swiss Re sigma
Rate on line (RoL) Premium divided by limit: the standard reinsurance / ILS price metric expressed as a percentage of the layer. ILS market convention
CAT bond market Outstanding catastrophe bond market ~$61.3B (indicative / historical estimate, Artemis December 2025 report). Artemis.bm (Dec 2025)
Peril Frequency Reference

Indicative / historical estimates, as of source year. Not forward-looking projections.

Peril / TerritoryAttach.Exhaust.Source
Cat 3+ Hurricane landfall · US Gulf Coast8%2%NOAA hist. 1950–2024
M6.5+ Earthquake · Japan25%5%USGS/JMA
M7.0+ Earthquake · California6%1%USGS UCERF3
1-in-50 Flood · Europe2%0.5%JRC Flood Hazard Maps

Selecting a matching peril + territory pre-fills the attachment/exhaustion probabilities above.

Source Notes & Caveats
  1. Peril frequency data sourced from NOAA NHC, USGS National Seismic Hazard Model, JRC EU Flood Hazard Atlas, and JMA Japan seismicity records. All frequencies are historical estimates and do not constitute forward-looking projections.
  2. CAT bond market data from Artemis.bm ILS market database (2025). Outstanding market ~$61.3B per Artemis December 2025 report.
  3. Basis risk methodology follows academic conventions (Clarke et al. 2016; Swiss Re sigma parametric insurance framework). Expected basis risk loss uses the (1 − r²) variance-explained approach.
  4. Premium indication is illustrative only. Actual catastrophe bond pricing requires full catastrophe model runs from licensed vendors (AIR, RMS/Moody's, KCC).
  5. This tool does not constitute insurance advice or a binding quote.