Kathmandu. Nepal is at high risk of climate change. Not only the risk of earthquakes, but due to climate change, the risk of making life more difficult due to unseasonal rain, excessive rainfall, floods, landslides, high temperatures etc. is becoming more and more difficult.
In the last few years, we have been facing problems such as avalanches due to climate change, the loss of snow in the mountains even in the winter. Last year, floods and landslides triggered by unseasonal rains in The month of September caused unprecedented loss of life and property.
In this way, the damage caused by seasonal changes is becoming more complex. The task of assessing the damage is also getting complicated. In such a situation, the solution to provide compensation to the insured on the basis of pre-determined seasonal conditions has also come into practice rather than on the basis of the assessment of the damage after the damage. Where the existence of a predetermined condition is acceptable as the main basis for the insured to receive compensation, the damage assessment process does not have to be completed. Such an insurance solution is parametric insurance.
Parametric insurance is a simple, straightforward and fast paying risk transfer solution that is determined by a specific, pre-defined event, where the insured receives a payment immediately. As determined by independent, third-party statistical sources, if a predetermined event occurs (such as a natural disaster or weather event), the insured receives a compensation claim immediately, there is no hassle in completing the damage assessment process. Comprehensive risk-bearing and quick claim payments (where payments are available within weeks of the event) can help provide customers access to liquidity to reduce uncertainty and speed up recovery after the event.
##inline_tags_PLACEHOLDER_8#how does #प्यारामेट्रिक insurance work?##inline_tags_PLACEHOLDER_9#
Parametric insurance is a risk transfer tool based on an increasing amount of data available to describe risk events. This is especially well suited for natural disasters – but it can also be applied to other emerging risks where sufficient data is available.
Unlike the provision of traditional insurance, which should generally be directly confirmed by the harms associated with the risk event, parametric insurance is described by data describing the event. Given the real-time nature of data availability associated with these events, parametric insurance allows faster and more efficient payments without the need for time-consuming and often subjective evaluation. In addition, parametric insurance can be customized to meet the needs of institutions, providing maximum flexibility to customers as they seek to increase their flexibility.
##inline_tags_PLACEHOLDER_8#what makes #प्यारामेट्रिक insurance an attractive solution?
स्वतन्त्र##inline_tags_PLACEHOLDER_9#
Coverage is activated when predetermined event thresholds are confirmed, such as the proximity and intensity of the storm.
छिटोछरितो
Claim payment is faster and more transparent than traditional insurance because the event is confirmed by an independent third party. Assessment of damage is usually confirmed within a day, the compensation amount usually arrives within a week.
लचिलो
Any covered economic loss caused by a predetermined seasonal or natural condition is an indemnable expense under parametric insurance.
##inline_tags_PLACEHOLDER_8#What risks does #प्यारामेट्रिक insurance cover?##inline_tags_PLACEHOLDER_9#
Parametric riskweights are available for a large and growing list of risks. Examples of storms and tropical cyclones in the cases of experimentation; earthquake; Includes secondary risks such as severe storms, hailstorms, floods and fires, droughts; In addition to climate and weather risks such as extreme temperatures, excessive rainfall or snow, glacial lake eruptions; as well as operational concerns such as river height. There are also applications for emerging risks such as trade disruptions, cyber, cloud outages, supply chain problems, and risks associated with climate change and infection under non-physical damage.
नेपालमा Parametric Insurance Need:
The provisions related to parametric insurance have been implemented in hydropower projects in nepal’s insurance market. Implemented on Upper Trishuli Hydropower Project 1, the insurance scheme has also won the title of Underwriting Initiative of the Year ‘Underwriting Initiative of the Year’ under the Insurance Asia Awards for Excellence in 2022 for innovation. Similarly, Shikhar Insurance is also running parametric and index-based crop insurance schemes in bardiya, Kailali and some districts of Karnali province with the grant assistance of donor organizations.
The benefits of such insurance have not expanded in Nepal due to limited information collection stations and infrastructure. As important as it is in big projects, including hydropower projects, it is equally important for the marginalised sections of farmers who earn their livelihood by cultivating on small scales.
If the government is to expand the real benefits of micro insurance and agricultural and livestock insurance, then the implementation of index-based and parametric insurance should be included in the priority list. In this way, the implementation of the system of determining compensation on the basis of information and reliable data will also help the government’s efforts to address the problem of irregularities and fake insurance claims in agricultural insurance.
For the expansion of this insurance, the Massam Information Center, The Massam Station, reliable research and information related to crop production, and analysis system should be developed. The government should expand the construction and operation of the necessary infrastructure for collecting information by collaborating with the social responsibility of the private sector or in collaboration with donor agencies.
