CHILE
Exploring parametric insurance: covering earthquake disasters
BNP Paribas Cardif is pioneering in earthquake insurance in Chile with its innovative parametric insurance model. This fully automated solution streamlines the claims process, setting a new benchmark for disaster coverage. Unlike conventional insurance policies that require lengthy loss assessments, this coverage is triggered by pre-defined seismic intensity thresholds, ensuring instant compensation when an earthquake meets or exceeds the agreed criteria. This breakthrough makes insurance more accessible and reliable for millions of households in Chile.
A data-driven model for seamless protection
The claim is triggered using real-time seismological data. For example, if an earthquake surpasses a magnitude 7 threshold within a 100 km (62 mile) radius of the insured property, the compensation process could be activated automatically- eliminating the need for a claim submission. The pre-calculated payout is based on the earthquake’s intensity at the insured location, guaranteeing a transparent, frictionless experience for policyholders.
Beyond customer benefits, automation significantly reduces operational costs for distribution partners and insurers. By eliminating manual claims processing, it enhances efficiency, minimises fraud risks, and accelerates payouts. This proactive approach ensures predictability and transparency and thus reinforces customers’ trust, as policyholders know exactly under what conditions they are entitled to compensation.
Making insurance more accessible and inclusive
Over a million uninsured homes in Chile do not meet traditional structural insurance requirements. BNP Paribas Cardif’s parametric insurance bridges this protection gap, providing a crucial financial safety net for vulnerable communities. With a low monthly premium and instant payouts, the solution removes the complexity of traditional insurance, making earthquake protection accessible to a wider audience.
“At BNP Paribas Cardif in Chile, we seek to make insurance not only more accessible, but also more valuable. Considering that Chile is one of the most seismic countries in the world, the Products team created this initiative, whose objective is to deliver fast and transparent solutions to our customers at the time they need us most.”