Multinational AXA Insurance plans to launch parametric insurance in Thailand, targeting the agricultural and tourism sectors.
The company recently sought approval from the Office of the Insurance Commission for parametric insurance for the agricultural sector, said chief executive Claude Seigne.
Parametric insurance against travel delays will be proposed to the regulator next week, he said.
Parametric insurance is a protection product in which compensation is based on an independent parameter or index that is correlated to a client's losses, such as adverse weather causing crop losses and affecting agriculture-related businesses.
"Parametric insurance can eliminate many pain points of traditional insurance, including the time-consuming claim payment process and high costs, as the compensation [of the new product] is triggered by independent weather parameters and the claim payment can be transferred to bank accounts automatically," said Antoine Denoix, chief executive of AXA Global Parametric. "Moreover, it can be tailor-made globally."
He said this insurance solution can be applied to all weather-sensitive sectors, including agriculture, food and drink, construction, tourism, and transport.
"This represents a small revolution in the insurance business, as the insurer just asks a few simple questions such the claimant's location," Mr Denoix said.
Products need trust between insurance firms and customers to talk about the trigger point, which uses data from independent agencies and satellites.
There are currently no more than five insurance companies offering parametric insurance products, but its growth will accelerate in the foreseeable future.
Mr Denoix said there are an estimated 150 million people in more than 40 countries, including China, India, Taiwan, the Philippines and Malaysia, under AXA parametric insurance coverage.
