Liberty Mutual Reinsurance (LM Re) and Celest.Science today announced a collaboration to explore the development of a potential fallback methodology intended to support event characterisation for parametric tropical cyclone insurance when key weather data is unavailable or delayed.
Parametric insurance can provide payment when pre-agreed parameters relating to an event, such as a storm’s track, intensity or footprint, are met, rather than by reference to assessed loss. The speed and transparency of this process depend on access to trusted data. LM Re is exploring additional approaches intended to support data continuity amid an evolving risk landscape when access to essential observational inputs is disrupted.
The collaboration will explore how LM Re's parametric risk transfer expertise and Celest.Science's climate modelling capabilities could be combined to develop and test a potential missing data methodology. The proposed methodology would draw on multiple independent data streams alongside advanced physical and statistical modelling to characterise tropical cyclones, even when one or more traditional data sources are unavailable.
By reducing dependence on any single data source, the proposed approach aims to support confidence, objectivity and operational continuity in event characterisation. The collaboration will assess its potential to strengthen the resilience of parametric insurance and support fast and transparent claims settlement for clients when they need it 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.
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 where observational data is limited. The collaboration reflects Liberty Mutual Re's broader strategy of working with leading scientific and technology partners 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."