Parametric contract
Fairtrigger
Lookout Spur Roofing
March daily precipitation
Pays $2,000 per trigger day
Attachment 5 days, then it pays
Cap $28,000 most this can pay Pays $2,000 per day Chattanooga Lovell Field (USW00013882) records at least 0.25 in of precipitation, after the first 5 such days, in March. Cap $28,000.
Station USW00013882
Threshold ≥ 0.25 in
Window March Premium for this line
$5,308.52
Expected loss $3,400.00. Fairness 88.
$5,308.52 is the premium for $2,000 per trigger day after 5 days, cap $28,000.
A day at 0.25 in pays the same as a washout, and a day just under it pays nothing. The series is reanalysis at Chattanooga Lovell Field (USW00013882), so a storm that soaked the job and missed the airport is basis risk.
Licensed counterparty
Exchange partner — pending assignment. Fairtrigger does not insure this contract.
Demo — not an offer of insurance. Contracts will be issued by a licensed carrier.
Allowed by the mandate.
A person approved this historical line. It does not spend this month's mandate.
Demo — not an offer of insurance. Contracts will be issued by a licensed carrier.
Demo bind. Collateral is locked on the demo ledger. The trigger watches the archive from here.
Demo escrow locked · $28,000 moved from capital cash · no real funds
Expected loss $3,400.00
Mean of what this contract would have paid in the archive.
Risk load 1.32× $1,088.00
The amount above expected loss. The published load is 1.50×. Capital bids compete here.
Cost of collateral $190.25
8% a year on the cap, for 31 days.
Fronting fee $327.48
7% of the risk price, for the licensed counterparty slot.
Technology fee $50.00
Flat fee for the technology layer. Not a percentage of the premium, and not revenue from taking the risk.
TN surplus lines tax $252.79
5% applied to premium including fees. Illustrative tax treatment.
Gross premium $5,308.52
What the buyer pays.
With 30 seasons, empirical 99% VaR is the worst season (1996). Read it as a stress, not a precise tail model.