Descartes sets sights on expansion with parametric innovation

As the reinsurance industry gears up to leave Baden-Baden for another year, Descartes Underwriting, a specialist in parametric underwriting solutions, is quietly making waves.

Kevin Dedieu, co-founder of Descartes and chief science officer, explained the company’s evolving strategy to Baden-Baden Today.

“Descartes is expanding into new emerging risks. We are now acting beyond nat cat—for example, we started offering cyber products this year.

“The parametric market has grown substantially over the past months and years, and we see trends that confirm it’s here to stay,” Dedieu said.

This expansion speaks to the growing demand for parametric insurance among corporate buyers.

Dedieu explained: “Buyers want more certainty of payout when there is an event.

“They want to complement their product offering or their programmes with parametric products, and they extend to more coverage.

“They usually start with one peril but they might buy the programme for another peril.”

The parametric market’s evolution is driven by a broader range of risks, and Dedieu noted: “We see demand for what we call secondary perils dominating discussions.”

Parametrics for captives

This broadening of parametric products extends beyond corporations. “A lot of clients are now buying parametric insurance to use it with their captives, to retain a bit of the risk,” Dedieu explained.

“We give buyers a technical platform to price all types of perils.”

“We’ve seen more insurers looking at parametrics as a way to protect a part of their book against some perils, especially when there is a lack of capacity,” he added.

“Our key message is that we are consistent and we are here to help our clients with their needs.

“We are a tech-driven company with a team of around 100 people dedicated to modelling, whether in the research department or the software department. We give buyers a technical platform to price all types of perils.”

This approach allows Descartes to offer a wide range of products. “We are addressing more than 20 perils and are active in more than 60 countries.”

This year, the firm made a significant move by entering the cyber insurance market, and Dedieu hinted the company has more ambitions.

“We may expand into lines where we believe we have a data advantage and can assess the risk.

“We have recruited some specialists who will bring huge value for us to build our expertise and complement it with our data-driven approach to better price these risks,” he said.

“We have regular catch-ups with our reinsurers.”

Collaboration with reinsurers

Dedieu shared insights into Descartes’ scientific team and how they work with reinsurers. “Our science team is focused on developing models. In the team are people with PhDs in natural sciences, as well as software engineers and data engineers who support the governance of the models.

“We have regular catch-ups with our reinsurers, and they definitely appreciate that we add more colour to what we do,” he explained.

“We put a lot of effort into the modelling aspects, and maybe that’s a differentiator compared to other views clients might see,” Dedieu said.

On the upcoming renewals, he reflected on the challenges and opportunities ahead. “We know that, unfortunately, climate trends are here to stay, and we need to work with the assumption that things will not improve in terms of weather conditions and impacts,” he said.

For 2025 Dedieu sees growing demand in key areas. “We believe there will be more demand for some perils where there were losses this year, such as flooding in the US and Europe,” he said.

“In the parametric space, we see more demand for areas that were impacted.”

Finally, Dedieu hinted at exciting innovations in the pipeline. “We are weather experts, but we will be entering some new domains soon. It requires resources to develop new things, but we are confident that we will bring innovation to the field,” he concluded.

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