Parametric contract
Fairtrigger
Hollow Log Cabins
July daily precipitation
Pays $1,500 per trigger day
Attachment 4 days, then it pays
Cap $8,000 most this can pay Pays $1,500 per day Atlanta Hartsfield-Jackson (USW00013874) records at least 0.5 in of precipitation, after the first 4 such days, in July. Cap $8,000.
Station USW00013874
Threshold ≥ 0.5 in
Window July Premium for this line
$1,324.71
Expected loss $816.67. Fairness 88.
$1,324.71 is the premium for $1,500 per trigger day after 4 days, cap $8,000.
A day at 0.5 in pays the same as a washout, and a day just under it pays nothing. The series is reanalysis at Atlanta Hartsfield-Jackson (USW00013874), 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.
Inside the 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 · $8,000 moved from capital cash · no real funds
Expected loss $816.67
Mean of what this contract would have paid in the archive.
Risk load 1.32× $261.33
The amount above expected loss. The published load is 1.50×. Capital bids compete here.
Cost of collateral $54.36
8% a year on the cap, for 31 days.
Fronting fee $79.27
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 $63.08
5% applied to premium including fees. Illustrative tax treatment.
Gross premium $1,324.71
What the buyer pays.
With 30 seasons, empirical 99% VaR is the worst season (2022). Read it as a stress, not a precise tail model.