Explanation

Answer Example

For parametric insurance, I use correlation modeling to ensure the trigger events (e.g., weather indices) accurately reflect the insured risks. I also rely on external data sources such as meteorological data to create predictive models. For example, while valuing a parametric crop insurance product, I developed a model using historical rainfall data and agricultural yield correlations, ensuring the product was priced fairly and accurately. This approach addresses the unique challenges of parametric insurance, including data accuracy and trigger reliability.