Ninety’s Insurance Innovation Pulse March 2021 iii Circle
Ninety’s Insurance Innovation Pulse is our monthly round-up of new ideas in the global insurance industry. We cover headlining innovations, top innovation themes and innovation analysis for the month. Ninety’s Idea Pulse dashboard provides visual indicators of monthly innovation trends by business lines, regions, and Ninety’s innovation taxonomy – the Ten Types of Insurance Innovation.
The data for this report is compiled from officially-announced, ready-to-market innovations reported from leading insurers, reinsurers, and brokers across the world.
Our monthly round-up concludes with a showcase of five case studies of innovations from a cross-section of business lines and innovation themes. For the most part, the case studies chosen are representative examples of commonly recurring themes of the month rather than examples that focus on novel ideas or one-of-a-kind solutions.
- March, the last month of the quarter had an increased momentum in innovation activity. Ninety recorded a total of 77 new ideas and announcements across the globe from insurance businesses in March, not counting insurtechs.
- March innovations indicate a steady influx of forward-thinking ideas related to catastrophe risk management. Recent events such as floods from Storm Christoph in the UK and the Texas power grid failure in the US appear to have influenced risk assessment and new products this month.
- The themes of digitalisation, AI and data-driven innovation remained consistent in the March innovation activity.
The Top Innovation Themes in March
|Climate/Catastrophe Risk Management||New Risk Assessment Models & Methods||Cybersecurity|
|Digital Channels||UBI/Telematics/ Connected Cars||Customer Engagement|
Insurance Idea Pulse Dashboard: March 2021
- Extreme weather risks – floods in particular, also wildfires and earthquakes were the focus of natural catastrophe risk solutions this month. Satellite imagery and prediction models, real-time satellite tracking, satellite data and geospatial technologies feature in multiple innovations announced this month related to both risk assessment and risk event response. Synthetic Aperture Radar (SAR) is the term to watch for as the driving technology behind high-resolution satellite images and image data.
- Cyber risk management has been a consistent theme in this quarter and March was no exception – with an increased spectrum of cyber liability offerings complemented by industry-specific solutions. One such example is Munich Re’s cyber solution for the power industry. There was also a particular focus on broader technology risks observed in March characterised by performance guarantee insurance – for industrial automation and connected technologies in critical sectors such as transportation and logistics. The initial announcements in this category are specific vendor-insurance partnerships but hint at a broader trend going forward.
- The digitalisation of distribution – through embedded insurance or insurance at point of sale, on-demand coverage, agent and broker platforms were driving customer-facing innovation both in B2C and B2B models – across all lines. There is an uptick in digital channels and market ecosystems in March.
- Health innovation activity was muted in March. A handful of announcements came from the US in the area of employer-sponsored health insurance and self-funded insurance (one of Ninety’s Big Bets for 2021). Though there were few examples, a discernible trend seems to be emerging in the US – that of defined contribution group health plans as opposed to defined benefits. Tech giant Google continues to bet on the market – a collaboration was announced this month between Swiss Re, Google parent Alphabet’s healthtech Verily backing Verily subsidiary Coefficient – rebranded as Granular Insurance. Coefficient is a precision risk company that aims to use data-driven predictive insights to manage risk exposure and volatility in self-funded group health plans.
- Reinsurance and P&C lines accounted for more than 85% of ideas launched in March. The small and mid-size business market, commercial specialty, personal auto, homeowners, commercial auto and property segments all were in focus this month with health taking a backseat for the first time since the pandemic.
What this means for you: a Ninety point of view
- The past few weeks has seen some big insurers like Swiss Re and Zurich making Net Zero pledges and we see more and more climate risks being turned into new product opportunities. If you have not yet thought about how your organization is reacting to the climate crisis, now is the time.
- Health insurers should look for opportunities with the tech players coming into the market. Even though big techs entering the insurance space have been historically viewed with uncertainty, partnerships with companies like Google can offer many exciting opportunities.
- Insurers of all types should innovate in the Brand & Marketing category. For the longest time, we have seen no innovations in this area and we think that some fresh ideas could create a big return.
Five Innovations That Made Headlines in March
Lloyd’s Launches Parametric Earthquake Insurance Policy in New Zealand.
Lloyd’s has launched a parametric earthquake insurance policy in New Zealand, in partnership with start-up Bounce Insurance. The new product, also called Bounce, is designed to provide New Zealanders with affordable earthquake insurance and fast claims payments, to support customers’ needs following an earthquake and quickly cover immediate expenses incurred.
Bounce uses real-time GeoNet data to automatically pay customers within five days of a strong earthquake. GeoNet / GNS Science is the New Zealand government agency responsible for measuring earthquakes and provides objective identification of areas where customers have experienced a strong earthquake. Per Lloyd’s, this removes any potential conflicts of interest and provides transparency to customers on the data used and reliability of the product.
Payment eligibility is based on shaking intensity (the parametric trigger). This is measured by tracking Peak Ground Velocity (PGV), which triggers payment at levels of 20 centimetres per second and above. If the customers’ location experiences the PGV threshold, they would qualify as being eligible to receive payment within five days.
Claim payments are based on the strength of an earthquake, with payments based on “steps,” which means that the stronger the earthquake the more of the cover is paid out.
Bounce does not replace conventional earthquake insurance that covers significant losses. It works alongside conventional products to offer accessible earthquake insurance, with low monthly premiums, providing customers and their communities with financial resilience in the immediate aftermath of an earthquake. Bounce provides immediate cash flow to cover a wide range of miscellaneous expenses to kickstart financial recovery.
Bounce has been developed by the founder, Paul Barton, in partnership with Lloyd’s, Guy Carpenter, Marsh, and Jumpstart Insurance.
Swiss Re partners with radar satellite-based flood monitoring provider ICEYE to track and react faster to flood events.
Swiss Re has entered into a strategic partnership with ICEYE, the largest commercial synthetic-aperture radar (SAR) satellite operator and flood monitoring provider. ICEYE builds and operates its own commercial constellation of SAR satellites that is capable of imaging any location on Earth, day and night, regardless of cloud cover.
ICEYE’s radar satellite constellation, high-resolution imaging capabilities and rapid response analysis fuels ICEYE’s flood monitoring solution, designed for the insurance industry. The solution offers global coverage for Swiss Re to track and react faster to floods worldwide.
The strategic partnership will initially focus on floods and it is intended to expand to other perils soon after, such as wildfires, wind and earthquake damages. Swiss Re will gain access to ICEYE’s SAR data on flood events on a global basis, high accuracy observation-based flood maps, snapshots of the developments of individual floods, and water depth estimations within 24 hours for these events.
Swiss Re will make footprint assessments of the events available on CatNet® Premium – its proprietary geo risk platform – thereby enabling its clients faster loss assessment and payouts.
Swiss Re is not the only one moving towards satellite monitoring solutions. Insurers Generali, Willis Re and SCOR are also building risk assessment, prediction and loss estimation models that will make use of satellite technologies and data.
Willis Towers Watson launches a new cyber cover specifically for Power & Utilities companies.
Willis Towers Watson has launched CyNat, a new type of cyber insurance cover designed for Power & Utilities companies that address their specific risk issues. The global re/insurance broker states that their Natural Resources clients are concerned by the increasing number of cyber events impacting the sector and the increasing cost of these events.
CyNat has been developed to specifically cover the key industry exposures rather than trying to modify pre-existing generic cyber products. CyNat is structured for Power & Utilities businesses in the initial launch phase and will be followed with tailored solutions for other Natural Resources clients.
CyNat’s covers losses such as crisis management costs, business interruption cover in the event of a cyber incident that disrupts operations including where the incident occurs at a third-party IT service provider upon which the business relies, property damage and loss of hire arising from cyberattacks, fines and defence costs arising from regulatory actions including those from GDPR and the Network and Information Systems Directive (NISD).
Clients can also amend the CyNat covers to create an insurance solution that is completely tailored to their own needs.
Asirom VIG deploys Artificial Intelligence for the risk inspection of motor policies.
Asirom VIG, part of the Vienna Insurance Group (VIG) has announced that they are the first company in Romania and one of the first in Europe to use artificial intelligence (AI) in the vehicle risk inspection process for their CASCO car insurance product.
Asirom customers can perform their own risk inspection for CASCO policies, with the help of the application on the asirom.ro website, in less than five minutes, using only their mobile phone. Specifically, based on the offer number or policy, clients enter the application, photograph the car according to the instructions and submit the information to Asirom with a single click.
The photographs used to generate the inspection report are analyzed using technology partner Solera’s Intelligent Damage Detection. This tool is part of the company’s Qapter® solution, an end-to-end AI-powered claims platform. The technology is used to detect and document pre-existing damages at policy inception. This evidence is used to improve risk scoring at underwriting and ensure only new damages are estimated in a potential accident claim.
Asirom aims to include AI in the detection and assessment of damage in the process of investigating claims as well, thus ensuring full transparency for the customer, and reducing the time to process claims. Besides, damage inspectors will have a virtual assistant to assist them in assessing damage and proposing appropriate technological solutions.
Insurtech start-up Vaai.co launches on-demand prepaid car insurance to address the insurance gap in South Africa.
South African insurtech start-up Vaai.co has launched an affordable on-demand car insurance solution designed for the uninsured and underinsured personal auto segment. Traditional auto insurance in South Africa is considered expensive for low-income groups in the country. Per Vaai.co, car owners in poorer localities pay higher premiums. Vaai.co aims to address the protection gap for this demographic with their solution.
Underwritten by Compass Insurance, the insurance plan works similarly to buying prepaid airtime, allowing consumers to purchase insurance enables consumers to purchase prepaid insurance that is valid for 24 hours.
To make use of the cover, customers buy a telematics device referred to as a ‘once-odd data logger’ for R350. The device then runs diagnostics on the vehicle to save users money on expensive mechanical and electrical damage. The box can detect if a user has been in a major accident and dispatches a towing service if an accident happens. Vaai.co also provides roadside assistance.
Users can select insurance according to their budget and access all the services offered on a free, user-friendly Vaai.co app. Cover starts at R40 per day for R13,000 daily cover and is capped at R120,000. Payments for the insurance can be made via the app or with a cash payment that is accepted at First National Bank ATMs in South Africa. To complete the proposition, Vaai.co offers zero excess fees from the day of purchase and with no debit orders.
Vaai.co stresses that the services are not a replacement for traditional car insurance as it offers basic accident repair cover per day only for car accidents.
These are only 5 examples out of 77 that we have collected in February. To buy access to the data reach out to us at firstname.lastname@example.org. For those who want to get more familiar with our Idea Pulse 2021 report and some of themes and ideas we mention, see Idea Pulse 2021 report.