Insight
Parametric insurance: A captivating solution
Parametric policies, which pay based on the magnitude of an event, can bridge coverage gaps that are difficult to insure with a traditional indemnity policy.
In the past five years, many long-term care insurance carriers have moved from a claim cost model approach to a first principles model approach to create business projections and perform cash flow testing. This article discusses modeling and the information that companies can glean from a first principles approach.
Insight
Parametric policies, which pay based on the magnitude of an event, can bridge coverage gaps that are difficult to insure with a traditional indemnity policy.