If you, or your client, are new to parametric insurance it’s helpful to understand the basic concept of parametrics first. Unlike traditional insurance, which relies on lengthyloss adjustment procedures, parametric insurance pays out when a predefined event (i.e. flood, hurricane, earthquake, etc.) occurs as measured by a specified parameter, or index.
Driven by objective data and real-time monitoring from IoT, radar,and satellite imagery, parametric insurance provides a means to guarantee liquidity, via swift, direct payout, following a qualifying event. With no on-the-ground loss adjustment required, a parametric coverkeeps cost low while offering precise protection.