The phrase "parametric insurance" is correct and can be used in written English.
It refers to a type of insurance where the payout is determined based on a predetermined parameter, rather than the actual losses incurred. This type of insurance is often used to cover losses caused by natural disasters, such as hurricanes or earthquakes. Example: "After the devastating hurricane, many homeowners were grateful for their parametric insurance policy which provided them with immediate and predictable financial assistance, regardless of the actual damages to their property."
Drones and parametric insurance are helping insurers better serve harder to reach communities, enabling faster impact assessment and faster payouts respectively.
Unlike the normal claims-based insurance policies, where people are reimbursed afterwards, this is parametric insurance, which releases money the moment things begin to happen.
Parametric insurance products that make payments based on windspeed, water levels, evacuation orders, or disaster declarations rather than indemnifying incurred losses of the insured may work especially well for reaching new segments of young and small firms.
Enter the parametric insurance instrument.
Another use case for Blockchain is parametric insurance.
Parametric insurance dramatically reduces underwriting and loss adjustment costs, and those savings can be passed on to the consumer.
For developing countries, parametric crop insurance, which pays out on weather events, is seen as critical to ensure development gains are not wiped out in one wet or dry season.
The limited number of ground weather stations also impacts the implementation of weather based parametric crop insurance solutions (which have been widely used in India) to complement yield based approaches.
Rectifying these imbalances will be challenging for many of the largest players, thus creating an opportunity environment for entrepreneurial approaches that leverage technology, such as blockchain, artificial intelligence and parametric solutions, to make insurance a nimbler form of assurance in a complex world.
Indeed, Etherisc, a blockchain-based insurance platform, is pioneering parametric micro-insurance in Puerto Rico to respond to wind-events, such as hurricanes and windstorms.
(PDF 9 KB) 40173_2014_51_MOESM6_ESM.pdf Additional file 6 Effect of leaving school in an economic downturn access to employer-sponsored health insurance using a non-parametric specification for time since school-leaving: OLS model.
