What is Parametric Insurance?

by lakemen » Fri Apr 21, 2006 04:15 am
Posts: 1260
Joined: 18 May 2005

Parametric insurance can be defined as the type of insurance that does not provide the coverage for the total loss; instead, pays out according to the ex ante agreement to make a payment upon the occurrence of a natural catastrophe.

Parametric insurance is perfect for the high intensity but low frequency losses catastrophes.

Total Comments: 3

Posted: Fri Jul 15, 2011 08:25 pm Post Subject:

Thanks for the understanding the Parametric insurance to me .

Posted: Mon Jul 18, 2011 10:30 am Post Subject: Parametric Insurance

Parametric insurance is emerging as a new way to provide prompt budgetary support to governments subjected to major natural disasters, such as hurricanes and earthquakes, especially in small countries that are subject to frequent disasters, such as the small nations in the Caribbean region. The payment of claims is not based on actual losses, but on parametric triggers, which are specified intensities of the natural disaster in a specified location as measured by an independent agency.
Insurance Claim Adjuster

Posted: Fri Oct 21, 2011 12:03 pm Post Subject:

by specified intensities I take it you're referring to scales such as the richter scale for earthquakes and and Category ratings for the likes of cyclones and tropical storms? Frequency of natural distater losses seems to be increasing, so this may become a real growth market for insurance.

I take it this is more of a type of material damage policy that coprorates and governements might take out rather than someothing targetted at consumers such as homeowners insurance or the like?

the difference in premium for a home insurance policy would justify a catastrophe only cover in any case I'd imagine?

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