New Paradigm Group Launches Industry Parametric ProtectionSM (IPPSM)

Business Wire

Bespoke Solution With Wind Speed and/or Surge Height Trigger Is A More Transparent And Quicker Settling Alternative To An Insurance Industry Loss Warranty (ILW)

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- New Paradigm Group, through its subsidiary New Paradigm Parametric, LLC, today launched Industry Parametric Protection (IPP), an innovative, technology-based alternative to the traditional Industry Loss Warranty (ILW) for US Atlantic and Gulf Coast Named Storms and Hurricanes. Rather than using total industry loss from an event as the trigger, as ILWs do, IPP is triggered when predetermined wind speeds or storm surge heights are met or exceeded at preselected hurricane-hardened measurement stations. New Paradigm Group’s IPP eliminates the black box uncertainty – in terms of both accuracy of the industry loss data and the time period during which the industry loss is calculated – inherent to the ILW market.

Evan Glassman, President and CEO of New Paradigm Group, noted that IPP’s coverage options are completely bespoke and can vary by region, a key point given the high correlation between property damage and wind speed and levels of storm surge.

“Industry Parametric Protection offers insurers and reinsurers a platform that enables the most efficient capital to find its way to each peak zone or region,” Glassman said.

New Paradigm utilizes exclusive data from WeatherFlow’s unique growing network of hurricane-hardened wind monitoring systems, which currently includes nearly 100 stations located in key coastal areas. Stretching from Texas to the U.S. Northeast, the network registers the maximum sustained wind speed during a named storm and the data is collected and certified by Risk Management Solutions (RMS), a world leader in catastrophe risk models.

Both the purchaser and seller of protection will have access to monitor the wind speeds in real time, subject to the availability of cellular communications to various stations within the Weatherflow network during named storms.

Buck Lyons, CEO of Weatherflow, said: “Weatherflow has committed our substantial experience and technical expertise, along with a large financial investment, toward reliably and accurately measuring the force of hurricanes at landfall. We are incredibly pleased to now see our technical capabilities used in New Paradigm’s innovative effort to facilitate risk transfer and help the industry manage its exposures.”

“RMS is delighted to work with NPG on its new Parametric Protection product, making coverage easier and simpler for insurance buyers, and increasing the spectrum of risk transfer products and choices with which they can cover their risk,” said Ben Brookes, vice president, capital markets at RMS. “NPG's Industry Parametric Protection product is carefully designed to let buyers minimize basis risk by choosing appropriate hazard levels at which to trigger contracts, whilst providing the most transparent settlement process of any ILW type product."

IPP coverage is offered in multiple contracting formats on a deal-specific basis and can be utilized by cedants for:

Balance sheet and earnings protection
Retention de-risking
Localized Retrocessional or spike cover
Arbitrage and Growth opportunities
Rapid post-event capital infusion
Shareholder equity protection

New Paradigm was founded by Glassman, a leading South Florida insurance agent and entrepreneur, and Chairman Bradley Meier, who previously founded Universal Insurance Holdings (NYSE: UVE), whose subsidiary Universal Property & Casualty Insurance Company grew into one of the three leading writers of homeowners insurance policies in Florida over the two decades he led the company as Chairman, CEO, and President prior to leaving in February of 2013. While working as an insurance agent Glassman saw that his clients’ economic needs for hurricane recovery were not being met by traditional property insurance policies.

Glassman teamed with Meier to start New Paradigm and launched Hurricane PM, a supplemental insurance product to close the protection gap for policyholders in 2014 Industry Parametric Protection is being launched by New Paradigm to enable global insurers and reinsurers to utilize the platform for their own risk transfer and capital management needs.

“Having previously led a company that was a significant purchaser of wind catastrophe reinsurance in the United States, the traditional ILW was presented as an option to be considered as part of the reinsurance program each year,” said Meier. “I always found the basis risk surrounding the accuracy and compilation of the industry loss data, along with the lengthy duration for the loss data to be reported --to the extent that it could be -- to be a concern. IPP was designed to address those concerns by being transparent and rapidly settling to allow for a bespoke structure tailored for each cedant.”

About New Paradigm Parametric

New Paradigm Parametric, LLC is a subsidiary of New Paradigm Group, LLC. New Paradigm Parametric licenses data. New Paradigm Group utilizes proprietary parametric triggers to provide risk transfer solutions for both insureds and (re)insurance companies. For more information about New Paradigm Parametric, please visit www.IPPre.com. For more information about New Paradigm, please visit www.NPGINS.com