Liberty Mutual Reinsurance (LM Re), the sole treaty reinsurance business of the Liberty Mutual Insurance Group, has partnered with Celest.Science, a French climate-tech startup, to develop a robust fallback methodology for parametric tropical cyclone risk transfer, addressing data outages and reporting delays during extreme weather events.
Parametric insurance provides payment based on pre-agreed event, such as a storm’s track, intensity or footprint, are met, rather than by reference to assessed loss.
Because fast, transparent payuouts rely on trusted data, LM Re is exploring methods to maintain data continuity if essential observations are disrupted.
To solve this, LM Re and Celest.Science are combining reinsurance risk structuring with advance climate analytics to build a multi-source fallback framework.
The proposed framework fuses independent secondary data streams with advanced physical and statistical modelling to accurately characterise tropical cyclones, even if primary observation inputs go offline.
By reducing dependence on any single data source, the proposed approach aims to support confidence, objectivity and operational continuity in event characterisation.
Through this collaboration, the teams will evaluate how the methodology can enhance parametric insurance resilience and facilitate rapid, transparent claims processing when clients require it the most.
Any future use of the methodology in an LM Re product would be subject to successful technical validation, applicable governance approvals and the terms of the relevant insurance or reinsurance contract, the firm stated.
Jean-Christophe Garaix, Head of Parametrics & Agriculture, LM Re, said: “As the risk landscape evolves and the availability of critical observational data becomes increasingly uncertain, LM Re continues to explore innovative approaches intended to enhance the robustness of its parametric products.
“When a tropical cyclone strikes, our clients need timely access to funds so they can focus on recovery. Our collaboration with Celest.Science enables us to explore options that could provide that extra layer of resilience, even if a primary data source becomes unavailable.”
Celest.Science brings deep expertise in climate intelligence, applying artificial intelligence, climate physics and advanced modelling to fill gaps in observational data.
The collaboration aligns with Liberty Mutual Re’s strategic focus on partnering with scientific and technology leaders to drive innovation across its parametric portfolio.
Léo Lemordant, Co-Founder and CEO, Celest.Science, said: “Extreme weather often unfolds where observations are fragmented or incomplete. By combining climate science, physics-based modelling and AI, we aim to explore how we can reconstruct a robust picture of what happened. Working with Liberty Mutual Re allows us to explore how that capability could support greater resilience in parametric insurance for end users.”
