I’ve always believed that one way or another all products ultimately end up being parametric. And I know that’s a little sci-fi to say, but what I mean by that is any insurance product is fundamentally based on parameters. It’s just that those parameters sometimes are a little fuzzy. They’re built on a model that might be independent. […] So if you can imagine a world where you have access to everything in real time, […] you could potentially compute claims in an instant way, and in that universe, it’s technically all parametric.
Introduction
In the first iteration of our upcoming parametric series with Raincoat, Matthew sat down with Jonathan Gonzalez to delve into how parametric insurance can be integrated with traditional indemnity insurance, the technical and regulatory challenges, and the importance of creating products that customers perceive as fair.
Watch this space for some very exciting episodes coming up.
Key Talking Points
- Importance of iteration and scaling
- Parametric should be looked at as a tool
- The connection to smart contracts and parametric
- What is ‘truth’ in insurance?
- What is ‘fair’ in insurance?
- The key to successful integration
- How much human intervention goes into running the model
- Evolving role of brokers
- The openness of the insurance industry to new solutions
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By the end of this podcast, you should be able to meet the following Learning Objectives:
- Describe the connection between smart contracts and parametric and why this is important
- Explain the difference between ‘truth’ and ‘fair’ in insurance
- Identify how the role of the broker can evolve when it comes to parametric insurance and its integration
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