Issues Paper on Index Based Insurances, particularly in Inclusive Insurance Markets
Index-based insurances is defined as insurance contracts in which a claim is defined with reference to a pre-determined index (sometimes also referred to as parametric insurance). The paper, published on June 18th, focusses on the insurances usually directed at weather related or natural catastrophe event risks, primarily for insurance supervisors who are seeking to enhance financial inclusion in developing markets.
Since index-based insurances are increasingly looked to as a means to manage weather and catastrophic events, support food security and enhance access to insurance, the Issues Paper provides background on this product, describes practices and actual examples, identifies related regulatory and supervisory issues and challenges.
The Access to Insurance Initiative (A2ii), as the IAIS´s implementation partner on financial inclusion, was a member of the drafting group. The A2ii’s supervisor only WebEx call organised by the A2ii on the topic as part of its Consultation Call series was a key input to the drafting process.