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The InsTech perspective… covering intangible assets with parametric
US • Active assailant • InsTech podcast
Intangibles, such as intellectual property and reputation, have grown as a share of corporate assets for decades. This trend has widened the protection gap, the difference between insured losses and economic losses. On InsTech London podcast episode 146, AEGIS London’s Calum Williams noted, “You cannot put a price on the damage to the brand of a restaurant or hotel if a shooting occurs outside.” That loss would not be covered under a traditional policy, but parametric policies, like AEGIS London and Skyline Partners’ active assailant coverage in Dallas, have been developed to help companies manage intangible risks.
Wakam’s embedded parametric solutions for travel insurance
Europe • Travel • InsTech insight
In June 2021 Wakam announced a partnership with Setoo on parametric ferry delay coverage. We spoke to Eric Allombert, Wakam’s Chief Marketing and Communications Officer, about Wakam’s parametric products for travel. This article explores how parametric insurance can be applied more widely to the travel industry.
To manage is to measure: observations on the recent European floods
Europe • Flood • InsTech insight
Major floods in western Europe last week caused over 180 deaths and potentially billions of dollars of insured losses. We look at the companies assessing flood risk and discuss how solutions such as parametric insurance can provide additional protection for households and businesses.
In the news…
Swiss Re installs seismographs for faster earthquake insurance pay-outs
Japan • Earthquake • Sensors
Swiss Re Corporate Solutions has announced a partnership with seismograph manufacturer OYOSI in Japan. OYOSI’s compact seismographs, certified by the Japan Meteorological Agency, will be installed at the premises of parametric earthquake insurance clients. Swiss Re says the faster and more accurate data provided by the instruments will lead to quicker claims pay-outs.
EU grant for consortium developing marine index insurance
Europe • Marine
The European Union’s Horizon 2020 research and innovation programme has awarded a grant for FAIR Consortium to develop and test its index insurance product for the marine sector. The consortium consists of Skyline Partners, marine data provider eOdyn and geo-data analytics company Gisaïa.
Embedded platform Setoo merges with Pattern Insurance
US • Europe • Travel • Embedded
Setoo, a platform providing embedded parametric insurance products for the travel industry, has announced a merger with US start-up Pattern Insurance. The joint company, Pattern, will operate in the US and Europe. Setoo was profiled in our recent report on embedded insurance.
New Paradigm issues binding moratorium after earthquake
US • Earthquake
On Thursday 8 July, a magnitude 6.0 earthquake occurred near the California-Nevada border. As is often the case following catastrophic losses, New Paradigm Underwriters has temporarily suspended writing policies. The moratorium for its Shake and Pay parametric earthquake product extends to a 150-mile radius of the earthquake’s epicentre.
Catastrophe bond for Jamaica to provide $185m of coverage
Jamaica • Hurricane • Catastrophe bond
The first catastrophe bond for Jamaica, issued by the World Bank, will provide $185 million of protection at a 4.4% risk margin. The bond has a parametric trigger and covers named tropical storms and hurricanes in Jamaica. The structuring agents are Swiss Re Capital Markets and Aon Securities. The US Agency for International Development, the UK-funded World Bank Disaster Protection Programme and the Global Risk Financing Facility provided financial support to get the bond to market.
$223m drought insurance subsidy scheme in South Africa
South Africa • Agriculture • Weather
Only 20% of commercial grain farmers in South Africa have drought insurance. Traditional policies are expensive and climate change makes extreme weather more likely. Insurers and the government have developed a 10-year state subsidy scheme to increase drought resilience among farmers. Under the 3.2 billion rand ($223 million) scheme, the government will pay 75% of premiums for smallholders’ weather index insurance.
Puerto Rico insurer launches parametric products
Puerto Rico • Hurricane • Earthquake
United Surety & Indemnity Co. (USIC) is offering renters and homeowners up to $30,000 coverage for protection against earthquakes and $4,000 for hurricanes. Pay-outs are triggered by earthquakes above 6.5 on the modified Mercalli intensity scale, whilst hurricane pay-outs are based on the distance between the eye of a category 3 hurricane and the property insured.
Drought insurance for cassava farmers in Thailand
Thailand • Agriculture • Weather
Insurer Sompo Thailand is developing a weather index insurance program for cassava farmers, in partnership with food corporation Ajinomoto and its affiliate agriculture company FD Green. The product is targeted at the Kamphaeng Phet province. The index is based on satellite rainfall data from the Remote Sensing Technology Center of Japan.
Case study: FloodFlash £50k pay-out
UK • Flood • Sensors
A client of broker FOCUS Oxford Risk Management took out FloodFlash parametric flood coverage for his holiday let properties. When one of the properties was flooded up to a depth of 42cm in March 2021, the client received a £50,000 pay-out the following day.
Fiji government scraps VAT on climate risk microinsurance
Fiji • Agriculture • Weather
Fiji’s Economy Minister has announced that all climate and disaster risk microinsurance products will be exempt from VAT. This comes after the Ministry of Economy developed a parametric microinsurance product for the agriculture sector, which will be piloted in October this year. The VAT exemption is intended to make the product more affordable for those on low incomes.
10,000 hectares insured in Ukraine weather index pilot
Ukraine • Agriculture • Weather
Research company Corteva Agriscience worked with insurer ARX, broker GrECo and data platform meteocontrol on a pilot insurance programme for farmers in Ukraine. The policy is based on a soil moisture index, measured by the European Space Agency’s satellite observation.
InsTech London has profiled over 50 companies active in the parametric insurance space in our report Parametric Insurance – 2021 outlook and the companies to watch, which is available to download. The report is free to InsTech London corporate members, who can contact [email protected] to get access.
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