Agent & Broker News

Parametric Insurance Program Drives Catastrophe Resilience in Puerto Rico


Aon plc, a leading global professional services firm, has announced the completion of a historic parametric insurance program for the Government of Puerto Rico, aimed at helping the island reduce its insurance obligation to the U.S. Federal Emergency Management Agency (FEMA).

The parametric insurance coverage – which provides Puerto Rico with diversified insurance protection against hurricane and earthquake perils – represents the single largest government-sponsored parametric transaction for the Island. The program is also the first parametric insurance protection mechanism used to reduce FEMA’s Obtain & Maintain (O&M) requirement. 

The onshore and offshore parametric program will help drive Puerto Rico’s response to catastrophe events, enabling rapid liquidity to assist during recovery and reconstruction efforts. The innovative program provides Puerto Rico with access to diversified sources of capital and is an important step in closing the protection gap.

Paul Schultz, chairman and CEO of Aon Securities, commented: “We proactively worked with the Government of Puerto Rico to identify capital solutions for closing the protection gap, and collaborated with colleagues across the firm in an Aon United manner to deliver an innovative solution in a dynamic marketplace.  Aon Securities led a team that included subject matter experts across geography, product teams and analytics to deliver the optimized parametric solution for the Government.”   

The parametric cover does not require proof of loss to generate a pay-out; instead, pay-outs are triggered when a major hurricane or earthquake impacts Puerto Rico, breaching a pre-defined threshold.

In addition to structuring and placing the transaction, Aon provided advisory and consulting services to the Government of Puerto Rico, working in conjunction with a range of public agencies including AAFAF, FEMA, the Federal Oversight and Management Board for Puerto Rico (FOMB), the Office of the Puerto Rico Insurance Commissioner and COR3, among others.

Katie Sabo, managing director and state and local leader for Aon’s Public Sector Partnership, said: “This is an important cover, which will help the Government of Puerto Rico to navigate volatility and build resilience against natural disasters. It was a true testament to Aon’s deep public sector expertise, combined with our extensive knowledge in designing parametric solutions for such hazards that are tailored specifically to the needs of our state and local clients, which help them make better decisions.”

For more information about Aon’s Reinsurance Solutions, please visit:

Share this Post:
Posted by IRL Editor


ad ad

Related articles

Patrick Rastiello joins Ardonagh Specialty to lead North America Reinsurance expansion

Ardonagh Specialty has appointed Patrick Rastiello as CEO* of its North American reinsurance operations.   Patrick will be responsible for building Ardonagh Specialty’s US reinsurance...

Global Markets Overview: February 2024

In this Global Markets Overview, we explore our global outlook and share what we think it means for 2024. As...


Risk Management Trailblazer Presented with RIMS Highest Honor for Lifetime Achievement in Risk Management  NEW YORK (February 13, 2024) – At the RIMS New Zealand and Pacific Island...

Insurer’s Lease More Than Doubles Its Chicago Office Space

Sompo International Plans Move to 46-Story Tower at 155 N. Wacker A global specialty insurance provider is more than doubling the size of its Chicago office in a move a few blocks north, bucking the trend...

Haynes and Boone, LLP is pleased to announce that Peter A. Halprin has joined the firm as a Partner

Haynes and Boone, LLP is pleased to welcome Insurance Recovery Partner Peter A. Halprin to the firm’s New York City office. A Chambers USA-ranked attorney, Peter joins from Pasich LLP, where...

LIO Specialty Launches Revolutionary Online Portal for Life Science Insurance Solutions

Leading the Excess and Surplus Lines Market with Innovative Coverage for Cannabis and Nutraceutical Industries  West Conshohocken, PA– LIO Specialty Insurance Company proudly announces the launch...