Volcano Cat Bonds and Other Innovations: Charlie Langdale of Howden on New Applications for Insurance
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What is the purpose of the podcast and who is the guest, Charlie Langdale?
The value of risk that we have in the world, especially looking forward, is just in you know of incalculable volumes. What can the insurance market do to pick up the pieces when those disasters happen anyway? Because they're going to happen and they're going to happen more frequently, especially when it comes to natural catastrophes.
Hello, everyone, and welcome to Orbit, the HG podcast series, where we speak to leaders and innovators from across the software and technology ecosystem. I'm Andrew Land, I'm a partner at HG, and my focus is on the insurance sector. And as such, today I'm joined by Charlie Langdale, who is the head of financial lines at Howden Group, the global insurance broker and HG Portfolio Company. Charlie, a very warm welcome, and perhaps you'd like to introduce yourself yourself and your role at Howden.
Well, thank you very much, Andrew, and it's great to have this opportunity to talk to you about um some of the things that we are doing. So I've uh been at Howden now for 20 years, and I uh my primary role has been looking after financial lines in the group, but uh also I've taken recently taken this role looking after sustainability and resilience in insurance for us as well. Um that's a great project which I very much enjoy getting involved with.
The first area I would love to get your thoughts on, and it relates very much to uh sustainability, is the topic of parametric insurance. And of course. The insurance industry has been around for a very, very long time, three, four, five hundred years, I imagine. Um, and there's not been that much innovation over that period. But in recent years, the parametric market has really begun to take off. And I I'd love to get your views on when that sort of kicked off really and and the history of that. And then in particular, how you're seeing some examples of that working in the market today.
Yeah, no, it's a fascinating subject. Yeah, and um and the thing is I suppose it makes a lot of sense. Uh the way insurance the insurance markets worked in the past. or still works now of course, is that you buy insurance policy against a a potential loss you have. And when you have that loss, you have to approach the insurance company with that loss, prove the loss in order to get your your claim paid, or to get your indemnification as it were. So for for some time this is nothing new about parametric insurance, but for some time people have thought, Well, is there another way of doing this? Why don't we just have a a a uh contract which just simply pays A sum of money to the holder of the contract once a certain trigger is hit.
So there's no need for the uh for the holder of that contract, either buyer of the insurance, to prove a loss or to approach the insurance market with uh with um uh a loss adjustment uh process, which is all time consuming and difficult to do, and reduces certainty. So parametric insurance is designed to to massively increase certainty of insurance contracts because it relies just on a trigger or two triggers perhaps being hit before the insurance policy delivers the money to the buyer. Now, it doesn't work in all situations. There's lots of types of uh of areas of risk transfer where parametrics doesn't really work very well.
How does Charlie describe his role at Howden and his focus on sustainability and resilience?
But it's coming to the fore now because we are able to, using sort of new technology, data analytics, we're able to design triggers and then indices which um which which lend themselves very well to this this idea of single trigger insurance. Um and we and one of the areas where we're doing this um is in the disaster relief space, which I know you know is is is a hot topic at the moment, bearing in mind climate change and things going on in the world generally. Um but there's lots of other areas as well. So you can think of situations where um parametric works very well with um with uh um with with event insurance, for example. on rainfall events or high temperatures or high wind speeds, which are things which can be um which can be analysed and um triggered by uh by by by data very easily.
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Chapters
8 chapters
1
What is the purpose of the podcast and who is the guest, Charlie Langdale?
0:02–3:01
2
How does Charlie describe his role at Howden and his focus on sustainability and resilience?
3:01–7:59
3
When did parametric insurance start gaining traction and why is it different from traditional coverage?
7:59–12:10
4
How do parametric triggers work and what types of natural‑event data are used?
12:10–15:05
5
What is the volcano‑bond product and how does the ash‑plume trigger provide pre‑disaster funding?
15:05–19:06
6
How is basis risk managed in parametric policies and what are its limitations?
19:06–23:42
7
How can parametric insurance be applied to disaster‑relief charities and ESG projects like mangrove restoration?
23:42–27:13
8
Will blockchain accelerate insurance innovation and how is it being used in Howden’s volcano bond?
27:13–28:53
Speakers
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