Parametric Insurance: A Tool for Climate Adaptation Climate change is increasing the frequency and intensity of extreme weather events, causing significant economic losses and disrupting lives. Traditional insurance models often struggle to keep pace with these changes. Parametric insurance offers a promising alternative, specifically designed to support climate adaptation strategies. What is Parametric Insurance? Unlike traditional insurance that focuses on physical damage assessments, parametric insurance triggers payouts based on predetermined metrics, such as rainfall exceeding a certain threshold or a drought reaching a specific severity level. This "if-then" approach offers several advantages: Faster Payouts: By relying on objective data, parametric insurance eliminates the need for lengthy damage assessments, allowing for quicker access to funds for recovery. Lower Administrative Costs: The streamlined claims process reduces administrative burdens for bo...
Wealth Management