Claims considerations for parametric insurance

Parametric insurance is one of the most promising innovations of the InsurTech revolution because it fulfills two key promises of InsurTech: operational efficiencies gained through technology and automation; and increasing demand-side opportunities to sell insurance.

What is parametric?

The NAIC states: “The term ‘parametric insurance’ describes a type of insurance contract that insures a policyholder against the occurrence of a specific event by paying a set amount based on the magnitude of the event, as opposed to the magnitude of the losses in a traditional indemnity policy.”