Parametric insurance – or indexed-based insurance – is becoming an increasingly popular alternative risk transfer solution among insurance buyers. Traditional insurance is struggling to keep pace with a fast-changing risk landscape.
Increasing premiums for reduced cover or inability to get cover reflective of individual risk profiles has led to corporate insurance buyers calling for new and innovative ways to support their risk financing strategies.
Improvement in the collection and reliability of data and increased sophistication in risk modelling is allowing insurers and insureds to better understand their risks and exposures, leading to the creation of bespoke index-based insurance solutions that fill the gaps in their risk financing programs.
What’s in this guide?
This guide will provide you with an overview of:
What is parametric insurance?
How does it work?
What types of risks can parametric insurance cover?
How parametrics can support traditional insurance
What are the advantages of parametric insurance?