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Parametric insurance is a type of contract that protects policyholders against specific events by paying a predetermined amount based on the event’s magnitude, rather than the extent of actual losses, as in traditional indemnity policies. SAS and the Open and Embedded Insurance Observatory recently conducted a survey on this space that is experiencing important growth due to the increasing frequency and severity of natural disasters and the demand for faster, more transparent claims processing.
The objective of the survey is to explore the key drivers and challenges, the role of data, AI and modeling, and future trends in this emerging area of the insurance market. To gain a more comprehensive perspective, the survey included insurers, reinsurers, managing general agents, and brokers.