Automate parametric insurance trigger evaluation and payout

Verified steps

1. Define the parametric trigger in the policy contract: specify the index (e.g., wind speed at a named weather station, rainfall depth at a NOAA gauge, earthquake magnitude from USGS), the threshold value, the measurement source, and the payout schedule.
2. Subscribe to the authoritative data source's event feed or API (e.g., NOAA CDO API for weather events, USGS Earthquake Hazards Program API at earthquake.usgs.gov for seismic data); ensure the data source is the contractually specified measurement authority.
3. At each measurement interval or upon event detection, retrieve the index value for the defined measurement location; compare it against the policy's trigger threshold using the exact methodology specified in the contract (e.g., maximum gust within 24 hours at the reference station).
4. If the threshold is breached, calculate the payout according to the policy's parametric schedule (linear scale, binary, or tiered); record the triggering event data (timestamp, measured value, data source ID) as immutable audit evidence.
5. Initiate the payout workflow: generate a claim record, create a disbursement request for the calculated amount, and route through your payment system (ACH, wire, or push-to-card) without requiring the policyholder to file a traditional claim.
6. Notify the policyholder of the trigger event and payout amount via their preferred channel; provide the event data supporting the trigger as transparency documentation.