AIG – Parametric insurance

AIG is a provider of parametric insurance, which protects against economic loss caused by certain environmental conditions, weather events, or catastrophic perils that are not typically covered by more traditional insurance products. Coverage is triggered by an event such as excessive rainfall, heat, or cold, within a designated geographic area and reaching specified parameters.

Parametric insurance links the amount of the loss payment to occurrence of the triggering event, providing a pre-determined dollar payout upon its occurrence. Such coverage is often sought by businesses that are particularly vulnerable to certain kinds of environmental conditions, such as agriculture.

Changing weather patterns are creating disturbance in traditional insurance models. The parametric coverages offered by AIG are designed to boost the financial and socioeconomic resilience of small and larger business entities in the most underdeveloped or disaster risk prone regions of the globe. As climate-related weather risks become increasingly complex and unpredictable, parametric insurance offerings provide an option for our clients from the traditional coverage mechanisms to predefined triggers or payout mechanisms, supporting this changing environment.