In the ongoing struggle to come up with new products to cover catastrophe losses, there is one new twist worth watching–a derivative product that is triggered not by actual losses, but by a force of nature, regardless of the subsequent damage claims. Read on for details and let me know what you make of this initiative?
You can read full details about this so-called “parametric insurance” by clicking here.
But suffice it is to say that basically, the product pays off not when a certain amount of damage is confirmed, but when a certified level of wind speed, ground shake or flood water hits.
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