Smart Contracts in Parametric Insurance Market Report 2025

The smart contracts in the parametric insurance market size has grown rapidly in recent years. It will grow from $9.97 billion in 2024 to $11.32 billion in 2025 at a compound annual growth rate (CAGR) of 13.5%. The growth during the historic period can be attributed to the rise in climate-related disasters, increasing demand for faster claims processing, expanded use of parametric insurance in agriculture, greater awareness of disaster risk financing, and growing adoption of microinsurance in vulnerable regions.

The smart contracts in the parametric insurance market size are expected to see rapid growth in the next few years. It will grow to $18.56 billion in 2029 at a compound annual growth rate (CAGR) of 13.2%. The projected growth in the forecast period is driven by rising demand for automated claim settlements, increased adoption of decentralized insurance models, growing interest in climate risk coverage, expanding government initiatives for disaster preparedness, and heightened focus on underserved and emerging markets. Key trends expected during the forecast period include technological advancements in blockchain applications, innovations in automated payout systems, increased investment in smart contract-based insurance tools, development of parametric products for emerging risk areas, and progress in integrating artificial intelligence (AI) and Internet of Things (IoT) technologies with smart contracts.

The increasing adoption of cloud-based systems is expected to drive the growth of the smart contracts in parametric insurance market. Cloud-based systems are online platforms that provide computing power, data storage, and software services on demand, eliminating the need for on-site infrastructure. The rise of cloud adoption is driven by their scalability and flexibility, allowing businesses to easily adjust resources as needed without hefty upfront costs for infrastructure. Cloud systems enhance smart contracts in parametric insurance by enabling real-time, scalable data processing and secure automation. They improve efficiency and transparency by streamlining claims execution and policy management, thereby reducing administrative burdens and settlement times. For example, in December 2023, Eurostat, a Luxembourg-based government agency, reported that 45.2% of enterprises purchased cloud computing services in 2022, marking a 4.2% increase from 41% in 2021. As such, the increasing adoption of cloud systems is fueling the growth of the smart contracts in the parametric insurance market.

Key companies in the smart contracts for parametric insurance market are focusing on strategic partnerships to improve data accuracy and deliver faster, more transparent claim settlements. Strategic partnerships allow organizations to combine strengths and resources to achieve mutual objectives. These collaborations also enable the seamless integration of technologies such as blockchain and satellite data, enhancing solution effectiveness and expanding market reach. For example, in June 2023, Arbol Inc., a U.S.-based climate risk solutions company, partnered with The Institutes RiskStream Collaborative, a U.S.-based nonprofit blockchain and emerging technologies consortium, to launch dRe, a blockchain-powered parametric reinsurance platform. This platform enables automatic reinsurance payouts based on climate or weather triggers, improving efficiency and building trust. It supports rule-based smart contracts for real-time execution and offers a decentralized structure to enhance security and data integrity.

In May 2025, IBISA Network S.A., a Luxembourg-based climate insurtech company, teamed up with Ensuro and One Acre Fund to provide farmers with smart, fast, and secure climate risk protection. This partnership aims to offer an affordable, blockchain-based parametric insurance solution that uses satellite data and smart contracts to automate claims processing, reduce administrative costs, and ensure timely payouts to smallholder farmers affected by adverse weather. Ensuro is a U.S.-based provider of blockchain-based parametric insurance, while One Acre Fund is a Kenya-based social enterprise.

Major players in the smart contracts in parametric insurance market are AXA Group, Aon plc, NEC Corporation India Private Limited, Ensuro Technologies SL, Descartes Underwriting SAS, ScienceSoft USA Corporation, WalkingTree Technologies Private Limited, Tractable Ltd., Chainlink Foundation, Arbol Inc., IBISA Network S.A., Blink Parametric Limited, Etherisc GmbH, Demex Group Inc, Raincoat Inc., Otonomi Ltd., FloodFlash Ltd., Nexus Mutual Ltd., Tidal Finance Ltd., Veteran Sandra DeSilva.

North America was the largest region in the smart contracts in parametric insurance market in 2024. The regions covered in smart contracts in parametric insurance report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the smart contracts in parametric insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s recommendations and conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.

Smart contracts in parametric insurance are self-executing digital agreements coded on a blockchain that automatically trigger payouts when predefined conditions - such as specific weather data or natural disaster parameters - are met. These contracts remove the need for manual claims processing by relying on objective data sources. They facilitate faster, more transparent, and efficient insurance settlements with minimal human involvement.

The primary solution types for smart contracts in parametric insurance include parametric insurance software and services. Parametric insurance software enhances policy management by automating trigger-based claims processing using real-time data and smart contracts. The various parametric insurance types include natural catastrophe insurance, specialty insurance, and others. Technologies employed include blockchain-based smart contracts, artificial intelligence or machine learning-integrated smart contracts, and Internet of Things (IoT)-enabled smart contracts. These solutions serve key end-users such as corporations, individuals, and government or public sector entities.

The smart contracts in parametric insurance market research report is one of a series of new reports that provides smart contracts in parametric insurance market statistics, including the smart contracts in parametric insurance industry global market size, regional shares, competitors with the smart contracts in parametric insurance market share, detailed smart contracts in parametric insurance market segments, market trends, opportunities, and any further data you may need to thrive in the smart contracts in parametric insurance industry. This smart contracts in parametric insurance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The smart contracts in parametric insurance market consists of revenues earned by entities by providing services such as automated claims processing, real-time data integration, risk assessment modeling, policy issuance and management, blockchain infrastructure development, and smart contract coding and deployment. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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