Index-based insurance
Glossary: Resilience, published by the Department for International Development in 2016, defines index-based insurance or parametric insurance as: ‘A form of insurance that makes indemnity payments based not on an assessment of the policyholder’s individual loss, but rather on measures of a parametric index (e.g. weather or geological observation such as rainfall, Richter scale reading) that is assumed to proxy actual losses.’
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