Parametric policies designed for lower-income consumers could help bridge the disaster insurance gap.
Globally, uninsured damages from disasters add up to over US$160bn per year, with 96% of this protection gap affecting emerging economies. Parametric disaster insurance can help by offering protection to many of those who are most vulnerable to natural hazards.
The Yokahu insurance company offers small-scale parametric insurance policies against hurricanes in the Caribbean – typically covering individual households that would otherwise be uninsured.
Parametric insurance insures policyholders against the occurrence of a specified event, paying a set amount triggered by predefined parameters for that event. This allows a much quicker pay-out than traditional indemnity insurance that is based on the assessed value of damages.
PreventionWeb spoke to Yokahu CEO Tim McCosh about how this approach to disaster insurance could help to improve resilience.
FULL INTERVIEW AVAILABLE HERE