Transaction Cost
Parametric insurance may reduce transaction costs involved in writing and administering insurance policies because there is less need for actual loss assessment for payment of claims or underwriting rating requirements to determine the premium based on liabilities and extent of risk sharing.
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Famous quotes containing the word cost:
“The true reformer does not want time, nor money, nor coöperation, nor advice. What is time but the stuff delay is made of? And depend upon it, our virtue will not live on the interest of our money. He expects no income, but outgoes; so soon as we begin to count the cost, the cost begins. And as for advice, the information floating in the atmosphere of society is as evanescent and unserviceable to him as gossamer for clubs of Hercules.”
—Henry David Thoreau (1817–1862)