Publication of the article by Dolores Mas Badía "¿Cómo combatir la brecha de protección de los seguros contra catástrofes naturales?" (‘How to beat the protection gap of insurances against natural disasters') in Journal of the Law of the Financial System RDSFin.
The solution suggested by the European Insurance and Occupational Pensions Authority (EIOPA), to beat the protection gap of the insurances against natural disasters is based on two complementary cornerstones:
- A public-private reinsurance system of the European Union, of voluntary access
- A European Union’s fund to publically finance disasters, of compulsory affiliation for every member State
In the last copy of the Journal of the Law of the Financial System RDSFin, the professor of Civil Law and member of the Institute, María Dolores Mas Badía, publishes an article suggesting the development of a mechanism that is already well-established in different countries of America undertaking the risk of natural disasters, which may work in a complementary way to achieve a common goal: insurances or parametric covers.
We hope this is of interest to those wishing to learn more about this concept, which we will continue to explore in depth within the Working Group established for this purpose.
Article data
- Seguros paramétricos, riesgos catastróficos y nuevas tecnologías: ¿un modelo en ciernes en España y Europa?
- María Dolores Mas Badia, Universitat de València
- Key words: Parametric insurance, parametric index, insurance contract, indemnity principle, natural disasters, climate change
How to cite
Seguros paramétricos, riesgos catastróficos y nuevas tecnologías: ¿un modelo en ciernes en España y Europa?. (2026). Revista De Derecho Del Sistema Financiero, 24-72. https://turia.uv.es/index.php/RDSFin/article/view/32915
Abstract
Phenomena such as the DANA lived in Valencia and Castilla-La Mancha by the end of 2024 are a trigger for attention to the so-called parametric insurances or insurances based on indexes in Europe. New technologies allow to define more precise indexes for risks related to climate change, among others, and use techniques that lead to the prompt payment, such as those linked to blockchain and smart contracts. In order to trigger the right to collect the stipulated amount, it is not necessary to prove actual damage. This is the main difference with the ordinary damage insurance and the interest key of this contractual model. Nearly studied in our country, it entails challenges starting with its consideration or not as a real insurance contract given the way it challenges the indemnity principle. The argument presented here, while acknowledging the challenges and differing expert opinions, suggests that the indemnity principle should be interpreted flexibly enough so the contract doesn't lose its identity as insurance. There is, however, a limit to this. Based on the policy terms, it must be possible to link the payment to a level of damage that was calculated actuarially—with a tiny margin of error—as probable and based on objective data from specific technologies. If this condition is met, we believe there is an absolute presumption that damage exists once the parametric trigger occurs, representing a loss estimated in advance. After exploring these points, the text breaks down the practical pros and cons of parametric insurance and analyses Chile’s recent regulatory experience, which could be highly useful for shaping the regulation of this type of coverage in our country.
