- Growth of Parametric Insurance Products
Parametric insurance is a novel approach to managing risk that is gaining traction in Europe as a way to address the growing risks posed by natural catastrophes and other unpredictable events. Unlike traditional insurance policies, parametric insurance is based on predefined triggers rather than actual losses. This means that payouts can be processed more quickly and efficiently, reducing administrative costs and providing greater certainty for both insurers and policyholders.
Parametric insurance is particularly useful for insuring against risks that can be measured objectively, such as natural disasters, supply chain disruptions, and revenue volatility for businesses. Parametric insurance is helping to fill the gaps left by traditional insurance and is expected to play an increasingly important role in risk management in the future.