How Parametric Insurance Helps Reduce the Total Cost of Risk

Many organizations express frustration with traditional insurance solutions from two standpoints. When insured events occur, the insurance recovery process can take a long time. On top of this, the recovery may only cover a portion of the economic loss experienced. These factors create a “protection gap” between the exposure and what is insured, requiring insureds to retain more risk than they would otherwise prefer to do. To address these challenges, more organizations are looking to innovative products, such as parametric insurance, as a solution to better address their risk exposures.

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