From: Insurtech Insights
Insurtech Insights speaks to three parametric experts about why this swift and transparent approach to insurance is gaining ground in our increasingly unstable climate.
In the wake of Hurricane Beryl’s devastating impact on the islands of Grenada, St. Vincent, and the Grenadines, the importance of parametric insurance – and its rising popularity in the NatCat space, is becoming increasingly evident.
Parametric insurance, unlike traditional indemnity insurance, pays out based on the severity of the event rather than the extent of the damage. This rapid response mechanism is set to provide much-needed funds to the affected islands, aiding in their swift recovery.
With the increasing regularity of extreme weather events occurring, (hurricanes, typhoons, and tropical cyclones are essentially the same weather phenomenon – namely large tropical storm systems that revolve around an area of low pressure and produce heavy rain and wind speeds exceeding 74 mph (119 kph) the insurance industry is under increasing pressure to find a solution that both serves customers speedily in dire situations of loss, without incurring huge losses themselves.
