AFTER years of limited interest from businesses and brokers, Fraser Fontaine & Kong Ltd (FFK) says recent hurricane activities have renewed attention around parametric insurance as companies look for faster ways to recover from weather-related disruptions.

President and Chairman Gerard Fontaine said the brokerage had been examining parametric insurance for more than a decade before deciding to push the product more aggressively in the local market.

“People have purchased this before, and it didn’t live up to their expectations,” Fontaine said during a Jamaica Observer Business Forum.

According to Fontaine, the company spent years studying how parametric insurance products operated overseas and worked with specialists to develop models tailored to local businesses after concerns emerged about how some earlier policies performed. The renewed push comes after back-to-back weather systems in consecutive years — Hurricanes Beryl and Melissa in 2024 and 2025 — exposed the financial strain many businesses face while waiting on traditional property insurance claims to be processed. Explaining the difference between traditional and parametric insurance, Executive Director Martine Fontaine said the key distinction lies in how payouts are triggered. Once predetermined conditions, such as wind speeds or earthquake intensity, are met, payouts are made, rather than after physical damage assessments are completed.

“In Melissa we had a trigger at 8:00 am. By three in the afternoon we flipped the declaration to clients, and by Monday the funds were wired into the client’s bank account,” Martine disclosed to the Business Observer.

One of the main gaps in traditional insurance relates to what they described as “loss of market” — situations in which businesses suffer financially despite experiencing little or no direct physical damage. Using the tourism industry as an example, the FFK executives said hotels can lose significant revenue after storms due to cancellations and lower visitor arrivals even when their properties remain operational. Under traditional insurance, such losses are often difficult to recover because physical damage is usually required before claims can be processed. Parametric insurance can also help businesses recover costs tied to hurricane preparation, operational shutdowns and post-storm disruptions, which may not always be covered under conventional policies. Additionally, traditional insurance processes involving adjusters, deductibles and forensic assessments can sometimes delay payouts for businesses already facing financial pressure after disasters.

“[With traditional insurance] there are underinsurance issues, adjusters, deductibles and forensics — all parts of the traditional insurance process that can become a headache,” Martine said. “[People often feel the system] is designed not to pay out.”

Under the parametric model, clients submit a simplified declaration confirming they experienced financial loss once the agreed trigger event occurs.

“Once you declare, it’s a one-page declaration with the programme we have which says, ‘I have suffered a financial loss’,” she explained.

The brokerage said the product could apply to farmers, hotel operators and other property owners whose businesses are vulnerable to weather-related losses. Coverage may also extend to expenses such as re-landscaping, roofing, replacing damaged equipment and restoring business operations following severe weather events.

“Anything that you have invested in that you could have a financial loss for, a programme can be created,” she told the Business Observer.

Still, they cautioned against viewing parametric insurance as a replacement for conventional coverage, noting that payout limits may not fully offset major losses from catastrophic events. Instead, businesses should view it as part of a broader risk management strategy. The brokerage said policies are customised based on the nature of a client’s operations and potential exposure to financial loss. Coverage discussions have reportedly increased since last year’s hurricane season, although company executives acknowledged the product remains relatively unfamiliar within the local market.

MARTINE FONTAINE…in Melissa we had a trigger at 8:00 am. By three in the afternoon we flipped the declaration to clients, and by Monday the funds were wired into the client’s bank account.