Parametric insurance: faster payouts for climate risk
Introduction
Parametric insurance: faster payouts for climate risk explains how index-based coverage speeds recovery.
Clear triggers and reliable data reduce delays after extreme events.
Key Points
- Objective triggers replace loss-adjustment delays
- High-quality data reduces basis risk
- Transparent terms build stakeholder confidence
- Rapid payouts support recovery and liquidity
- Regulatory alignment keeps products scalable
How To
- Define the peril, geographic scope, and desired payout speed.
- Select trusted data sources and validate historical accuracy.
- Set trigger thresholds and payout curves with stakeholders.
- Design payout operations and communication plans in advance.
- Review regulatory requirements and partner with carriers.
Conclusion
Reliable data and clear triggers make parametric coverage credible.