What is the product?

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.

How does it support green outcomes?

Changing weather patterns are creating disturbance in traditional insurance models. The parametric coverages provided by AIG are designed to boost the financial and socioeconomic resilience of small and larger business entities in the most underdeveloped or weather-related disaster-prone regions of the globe. As climate-related weather risks become increasingly complex and unpredictable, parametric insurance provides an alternative coverage option for our clients different from traditional coverage mechanisms. Parametric coverage is triggered by predefined weather-related events and provides for payout of a predetermined loss amount following a covered event, supporting changing weather conditions and an insured’s speed to recovery by providing needed funds relatively quickly.