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For example, the Multilateral Investment Guarantee Agency covers hurricane risks based on category parameters and the World Bank designs earthquake parametric insurance based on the rigour parameter of earthquake on an appropriate measuring scale. National Insurance Academy in India propounded the concept of parametric life insurance premium setting based on variations in mortality table rather than setting constant level premium, which results in wide scale surrenders on improvements in mortality table due to better life expectancies at various age layers.
Another application of parametric insurance propounded by K C Mishra of National Insurance Academy, India is for managing risks of island dwellers. Usually islands depend on supplies from mainland or mainlands. If there is a parametric hazard in the mainland, the island dwellers suffer from supply bottlenecks leading to financial loss of debilitating dimensions. In such cases an index of parametrization is warranted if there can be supplies from multiple mainlands. Such improvization is better known as transinsurance rather than pure form parametric insurance.
Read more about this topic: Parametric Insurance