28th July 2025 (17 Topics)
1
Jul
2
Jul
3
Jul
4
Jul
5
Jul
7
Jul
8
Jul
9
Jul
10
Jul
11
Jul
12
Jul
14
Jul
15
Jul
16
Jul
17
Jul
18
Jul
19
Jul
21
Jul
22
Jul
23
Jul
24
Jul
25
Jul
26
Jul
28
Jul
29
Jul
Parametric Insurance and Climate Change
Context
In the wake of intensified climate-related disasters, Indian states like Nagaland have adopted parametric insurance to finance rapid disaster relief using predefined climate thresholds.
Definition and Core Mechanism:
- Parametric insurance is a non-traditional insurance model that provides payouts automatically when a predefined threshold of a measurable event is breached (e.g., rainfall, temperature, wind speed, seismic activity).
- Unlike indemnity-based models, parametric insurance does not require post-disaster damage assessment, significantly reducing claim-processing time.
Trigger and Verification Mechanism:
- Thresholds are based on independently verified datasets from agencies such as the India Meteorological Department (IMD), NASA MERRA, and other accredited global or national data sources.
- Payouts are processed automatically upon data confirmation of a threshold breach.
Application Sectors:
- Agriculture: Protects small-holder farmers from losses due to droughts, rainfall deficits, or extreme temperatures.
- Renewable Energy: Solar firms link payouts to solar irradiance data for compensation against low productivity.
More Articles
Courses
Study
Notes
Home
Resources
More
