BCMG Insurance Brokers has launched a new parametric insurance product designed to address the bureaucracy involved in the payout process following natural disasters.

The company said the new product “closes the standing gap in the local insurance market”—speed—by affording policyholders faster access to funds following disasters while helping to reduce overall insurance costs.

Parametric insurance differs from traditional coverage in that, instead of assessing physical damage after an event, payouts are triggered automatically once pre-agreed conditions are met. These conditions may include wind speed, rainfall levels or seismic activity recorded within a defined area.

The launch of the product comes when Jamaica continues to reel from the effects of increasingly severe weather events, including the passage of hurricanes Beryl and Melissa in 2024 and 2025, respectively.

For William Craig, chief executive officer of BCMG Insurance Brokers, the launch reflects lessons learned from the recent hurricane seasons.

“There is a clear gap between how quickly people need financial support after a disaster and how long traditional insurance claims can take to settle,” he noted. “Parametric insurance helps bridge that gap by getting money into people’s hands quickly, sometimes within a month, so recovery is not stalled by paperwork.”

The BCMG CEO noted that the quick payout that comes from parametric coverage is critical in the immediate aftermath of a storm or earthquake. “That cash can be used to cover deductibles, repair items that are not insured, or simply keep a business afloat while normal operations resume,” he added.

Ian Miller, chief technical officer at BCMG, explained that the product has been structured with simplicity and predictability in mind.

“Many Jamaicans are underinsured, not because they do not value protection, but because traditional insurance can feel slow, complicated or too expensive,” he said. “Parametric insurance changes that. You buy a cover tied to a clear trigger and, if that trigger is met, you get paid. It removes uncertainty.”

In practical terms, a parametric wind policy might pay out if wind speeds exceed a specific threshold within a defined distance of a property. Once independent data confirms that the condition has been met, the payout is triggered automatically, without inspections, loss adjusters or negotiations.

Independent data sources are central to the model. Weather information is verified using third-party providers such as national meteorological services, satellite data and internationally recognised agencies. This objectivity reduces disputes and increases transparency for policyholders.

“When payouts are based on trusted data, there is no debate about whether damage qualifies,” Craig said, adding: “It gives clients peace of mind at a very stressful time.”

Cost efficiency is another key benefit, as parametric insurance lowers the operational costs by reducing the administrative processes associated with traditional insurance claims. Those efficiencies translate into more affordable premiums, while still delivering meaningful protection. Miller noted that the flexibility of payouts is also important.

“Because the funds are not tied to specific repair invoices, clients can use the money in whatever way best supports their recovery,” he said.

While parametric insurance does not assess actual damage, concerns about fairness are addressed through careful policy design. Triggers can be tailored to precise locations and risk levels, reducing what is known as basis risk, the gap between loss experienced and payout received.

BCMG emphasises that parametric insurance is not intended to replace traditional cover. Instead, it works alongside it to strengthen resilience.

“Parametric gives you speed, [while] traditional insurance gives you full indemnity. Together, they provide a more complete risk management solution,” Craig said.

For sectors such as agriculture, tourism and small business, faster recovery means stronger communities and greater economic stability. The launch underscores BCMG’s commitment to innovation as climate change reshapes Jamaica’s risk landscape, ensuring clients are better equipped to face what lies ahead.