Covid-19 Idea Pulse Alerts: Week 3
INSURER ACTIONS BETWEEN MAY 31 AND JUNE 12, 2020
The Idea Pulse series on COVID-19 monitors innovations and insurer strategies that are being shaped in response to COVID-19 and the post-COVID scenario. These are some of the noteworthy developments across the global insurance industry in the fortnight of May 30 to June 12, 2020.
|Key Takeaways this fortnight:|
Machine Cover an insurtech start-up is developing technology for what they consider as the world’s first parametric based cover for a pandemic. The plan is designed to be an add-on to existing commercial BI coverage and will trigger an automatic payout in the event of a significant decline in economic activity in a given area. Event triggers are not limited to pandemics alone but can also include large factory closures or road-building projects. The product is targeted for launch in Q1 2021. Centred around an automated claim payout proposition, the innovation of parametric insurance has been in the market for a while now. The far-reaching loss impact of the COVID-19 catastrophe, which has affected insurers across the world, is bound to accelerate innovation and adoption in this area.
Commercial insurers are also catching up on the trend. In May, Generali Group’s P&C arm, Global Corporate and Commercial, announced a strategic partnership with insurtech Descartes Underwriting, to offer parametric insurance products. Descartes Underwriting is an MGA specialising in weather risk modelling and data-driven risk transfers. The firms aim to utilise advancements in machine learning and image recognition combined with new generations of data sources coming from IoT and satellites to support the process.
Finally, global commercial broker Marsh will go down in insurance history as having the only pandemic insurance product in the market, PathogenRX, that everyone needed and no one bought, mainly because it was considered expensive. Launched in 2018 in collaboration with Munich Re, and epidemic risk modeller Metabiota, PathogenRX in fact, was a winner of 2018 Business Insurance Innovation Awards. Marsh had reported in April that they were increasing capacity in response to now skyrocketing demand for the same plan.
Digital Insurers in Asia
Wesure Insurance, a digital fintech subsidiary of Tencent China, reported that the coronavirus outbreak has spurred demand for insurance among “half-ready” users. Customers who are driving demand include women, those in their 30s and residents of cities that previously witnessed the 2003 SARS outbreak. WeSure has implemented a technology backed conversion strategy that includes a “curated portfolio” offering based on individual needs, social media marketing and AI-enabled “virtual claims concierge”. Engaging and educating customers through live streaming, WeSure sold 36,000 policies in one online broadcast session on May 20 alone.
Blue, a Hong Kong-based digital life insurer reported that pageviews of their website increased by nearly two times between January and April this year amid the coronavirus outbreak, compared with the similar period in 2019. The number of first-time visitors also grew by about 2.5 times. Blue has also launched “Revitalising Hope” Project offering free life insurance protection totalling HK$ 100 million to individuals in industries that were hit hardest by the pandemic. The industries include travel and hospitality, retail and food & beverage, as well as arts and recreation.
Insurtechs and Digital Health IPOs
The forced adoption of digital solutions brought on by COVID-19 and the ease of acceptance by customers have drawn investors who foresee a bright future for digital platforms. Digital homeowners and renters insurer Lemonade filed for an IPO on NYSE last week and has extolled the resilience of its business model during the pandemic in the prospectus. According to Lemonade its chatbots AI Maya and AI Jim that support new business and claims respectively ensured business as usual during the lockdown. Further, because their operations have been cloud-based since founding, Lemonade’s employees were able to work from home seamlessly during the pandemic.
AmWell, a US-based telemedicine provider which has partnerships with over fifty-five health insurers including United Healthcare and several Blues plans, also filed confidentially for an IPO last week. AmWell had previously raised $200 million separately in May. The investment is required for growth. AmWell reported a 1,000% increase in visits to their platform, and closer to 3,000% to 4,000% in some places during the pandemic.
Virtual Vet Consultations for Pets
In an extension of telemedicine, virtual vet services such as FirstVet have come to the aid of pet owners during the lockdown. Recognising the need for pets to have access to healthcare, several pet insurers have introduced video consultations with vets for policyholders at no additional cost. In the UK, Covéa Insurance has introduced virtual vet appointments through its partnership with FirstVet. Policyholders can book appointments as often as needed, by downloading a mobile app.
In the US, pet insurer Petplan is also offering free virtual vet visits for customers in the US and Canada. As an added incentive that dog owners will welcome, Petplan has also partnered with PhillyUnleased, a dog training service, to provide free online dog training sessions during the quarantine.