Who should pick up the cost for losses— the kind that are hard to model and define in insurance contracts— and how will they determine what those losses are? As we experience COVID-19 on a global level, conversations on the future of parametric insurance models have begun to rise.
Parametric insurance, also known as index-based insurance, offers financial protection against losses that are typically difficult to measure for insurance. Parametric insurance often provides cover excluded by indemnity style insurance policies, which are based on how much loss is experienced. Those that are insured receive compensation when a triggered event occurs, based on parameters and reimbursement values determined before coverage. When designed properly, parametric-based insurance products greatly increase the speed that claims are paid.
The claims processing delays that insurers are encountering as a result of COVID-19 are a nod toward the need for evolving insurance models. Every day, insurers are challenged with increasingly negative consumer sentiment due to:
- Unpredictable, unstable travel opportunities and requirements.
- Lack of certainty for claim payouts.
- Significant volume increases in needs for customer support over the telephone and online.
- Dependence on claims assessors and customer services teams.
- Reduced employees available for work.
- Stressful customer experiences, leading to long-term damage to brand loyalty and trust.
However, with all the negatives currently being experienced across the insurance industry on an international scale, insurtech products like our Eyewitness sensors are redefining the parametric space, changing how insurers provide service to business owners worldwide. Here’s how:
- Real-time claims processing removes the need for adjusters.
- No personal interaction saves significant overhead and operational costs.
- More accurate data collection and reporting increases trust, saves money, and streamlines operations.
Hailios is one of many insurtech providers innovating in the insurance space today. As a part of Lloyd’s Lab cohort 5, we’re currently working alongside leading innovators in our space to deliver products and solutions that support the COVID-19 response worldwide by assessing risks and helping customers adapt to a changing workplace. Find out more about Lloyd’s Lab.
Interested in learning more about the Eyewitness sensor? Click here.