Parametric Insurance

This type of insurance does not indemnify the pure loss. In Parametric insurance, the payout of the insurance policy is calculated using a model that shows the actual damage on the ground. This system provides payments in a shorter period of time compared to traditional insurance system, because it does not rely on loss adjusters after the earthquake to assess the damages.

Parametric Insurance Companies

The CCRIF is the world’s first multinational parametric insurance facility and is owned and operated byCaribbeangovernments. Swiss Re is the co-lead reinsurer of the CCRIF. RMS (Risk management Solutions) launched a parametric index for estimating insured industry losses fromU.S.earthquakes on 2010, called Paradex U.S. Earthquake. Paradex combines ground shaking data from U.S. Geological Survey (USGS) ShakeMaps with industry exposure data to calculate insured loss estimates.