Parametric insurance to build financial resilience
In 2024, Generali Global Corporate & Commercial and UNDP launched a joint research report titled “Parametric insurance to build financial resilience”, promoting the advantages of parametric insurance in supporting vulnerable communities.
With detailed real-life examples and case studies, the report explores how this innovative insurance solution offers tangible contributions to building resilience and closing the protection gap in the face of rising risks due to climate, demographic, and economic changes.
What is parametric insurance?
Unlike traditional insurance, which requires a loss to occur, parametric policies are triggered by specific events like a certain amount of rainfall or the magnitude of an earthquake. Leveraging new technologies and improved data accuracy to assess an event's intensity, once the threshold is met, quick payouts allow faster recovery for affected communities.
By offering immediate disaster relief, cost-effective and efficient risk transfer mechanisms, and protection from climate events and natural disasters, parametric insurance can reduce the financial burden of these events and promote financial resilience for governments, financial institutions, businesses, and households, unleashing productivity and investments.
