GK Insurance develops Livelihood Protection Policy plan
Farmers and persons living in areas that are susceptible to catastrophes can benefit from insurance coverage under a policy developed by GK Insurance.
The Livelihood Protection Policy (LPP) covers loss of income due to heavy rains or high wind speed.
Assistant manager in charge of strategy and business Support at GK Insurance, Jordan Tait, said the scheme is aimed at mitigating the effects of natural disaster, particularly in vulnerable communities.
He explained that the product is a parametric insurance. Unlike traditional indemnity insurance that covers a policyholder's actual loss, parametric insurance pays out in response to defined triggers. This means the insurer can quickly establish how much it owes the policyholder, providing faster, smoother payouts.
Tait said that GK Insurance adopts a method that is used globally where "we identify a threshold of wind speed or an amount of rainfall within certain geographical locations and once this threshold is exceeded there is a payout.
"After a disaster when you have to go out and assess damages, this will ultimately take a longer time to get compensation, which will slow down the recovery process. This method will speed up the recovery process significantly," he pointed out.
The annual premium under the LPP ranges from $6,600 to $66,000, while coverage ranges from $50,000 to $500,000.