Parametric insurance is a new form of insurance that works differently from traditional insurance stated Bahaa Abdul Hussein. In traditional insurance, when a customer suffers loss an assessment is done to determine loss. Payout depends on the assessment and is a slow process that takes its own time. Parametric insurance is revolutionary since payout her happens when an event is triggered. It is truly an innovative system, but it is essential to make this system popular. This is where building trust plays a key role.
Building trust in parametric insurance
Consumers prefer traditional insurance since they have been using it from decades. They are comfortable and generally resist change. Parametric insurance is innovative and offers a new approach to insurance payouts. While it is highly beneficial for customers, the problem is that most customers do not know much about this form of insurance.
In parametric insurance when an event like a flood or earthquake occurs, it triggers a payout. The occurrence of the event for the consumer is verified without bothering to assess losses. This verification is done quickly by a third party after which the payout happens instantly. This is a major benefit of parametric insurance, which is customer friendly.
However, parametric insurance has not become as popular as traditional insurance. Most consumers still prefer traditional insurance because of the lack of sufficient information about parametric insurance. It is vital to build trust among consumers if parametric insurance has to take off in a big way.
Here are some ways in which insurers can build trust among consumers:
- The first step is to create awareness. A large majority of people are not even aware of what parametric insurance is. Creating awareness is a prerequisite to building trust.
- The consumer must have full knowledge about parametric insurance. Consumers must be educated on parametric insurance features and benefits. They must understand how helpful it is for them and its unique way of working.
- Insurers need to build consumer loyalty through innovative ways. This is one of the best ways to build trust in the market. Loyal customers would help in spreading positive word of mouth in the market.
Conclusion
Creating awareness and educating consumers about parametric insurance is the best way to build trust. When consumers understand the benefits of parametric insurance and its consumer-friendly nature, they would be willing to trust and adopt it better. Insurers need to be proactive in taking measures to build such a trust. Thank you for your interest in Bahaa Abdul Hussein. For more information, please visit www.bahaaabdulhussein.com.
