Parametric insurance is a type of insurance in which the insurer pays the predetermined compensation to the insured based exclusively on the production and intensity of the risk, and not on the damage actually produced in each specific case.
This is a hot topic in Insurance Law, in constant development and with a promising future, since it offers some advantages over the traditional insurance system. Among them we can mention the immediate and automatic nature of the payment to the insured once the risk is verified, the reduction of associated costs, legal certainty and the considerable reduction of the risks of fraud to the insurance company. On the other hand, and as an inconvenience, it has been pointed out that the solution given by parametric insurance can sometimes deviate from the real damage, which will harm one of the interested parties, either the insured, or the insurer, depending on the circumstances of each case.
Parametric insurance opens up numerous possibilities in the future, as it fits, at least potentially, in risks related to new technologies, energy, tourism and hospitality, among others. At present it is are used mainly in the field of reinsurance and in relation to the management of large risks (climatic catastrophes, atmospheric phenomena).
Our seminar and round table will allow representatives from six jurisdictions (four Latin American ones, Spain and Portugal) to present the current regulations regarding parametric insurance in different countries, as well as its foreseeable future.