Ninety’s iii Circle: May-June 2022 Edition

Ninety’s Insurance Innovation Pulse is our new periodic round-up of the pulse of new ideas in the global insurance industry. We cover monthly highlights, top innovation themes, and Ninety’s Idea Pulse dashboard and innovation analysis for the month. The monthly dashboard monitors monthly innovation trends by business lines and regions and Ninety’s innovation taxonomy as well – the Ten Types of Insurance Innovation.

Officially announced, ready-to-market innovations, VC investments, and collaborations from leading insurers, reinsurers, and brokers form the basis of our analysis.

We also showcase 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.

In addition, we will also highlight examples of future innovation as seen through the lens of research and venture investment in emerging risks and technologies.

May-June 2022 Highlights

• During May-June 2022, Ninety recorded a total of 71 new ideas and announcements from insurance businesses around the world, not counting insurtechs.
• New products and lines dominated (22 out of 71 ideas); several of them were influenced by the post-Covid-19 travel boom, renewable energy, and the escalation of cybersecurity events.
• The trend of digital platforms and digitization of processes continued, with a focus on small businesses and customer experience enhancement. Moreover, insurance companies are particularly focusing on cyber insurance and incident response portals to protect against cyberattacks.
• Insurer investments included funding in healthtech, insurtech, sustainability, and fleet management start-ups.

The Top Innovation Themes during May-June

Insurance Idea Pulse Dashboard: May-June 2022

Ninety’s Analysis

• With Covid-19 behind, the focus has shifted towards emerging risks and technology enablers. Some of the most innovative ideas announced during May-June 2022 include insurance cover for self-driving vehicles, renewable energy risks, and AI risk management.
• In terms of insurance segments, Specialty, Reinsurance & Lloyd’s remains in the top position on the leaderboard. Commercial P&C, which has remained less than 15-20% over the previous months, witnessed a significant increase.
• The US, UK and rest of Europe accounted for 90% of new ideas and announcements in our dataset.

Five Innovations That Made Headlines in May-June

1. Insuring self-driving cars: Apollo Group launches Europe’s first autonomous vehicle cover.

Apollo Group has announced the launch of Europe’s first zero-occupancy, on-road Autonomous vehicle journey cover. The product that has been created for self-driving vehicles with zero-occupancy on the open road, are being completed through Apollo Group’s partnership with Oxbotica. The cover is in partnership with Aioi Nissay Dowa Europe for the UK marketplace and was arranged by broker Marsh.

The all-electric AppliedEV vehicle is currently operating in Oxford with no on-board driver, marking the next step in commercialising AV technology. Oxbotica will also now accelerate commercial deployment of autonomous vehicles globally. Oxbotica’s full stack, end-to-end universal autonomy software (the Oxbotica Driver) is both vehicle and platform-agnostic, with no dependence on external infrastructure such as GPS.

The Oxbotica Driver uses a combination of radar vision and laser-based sensors to provide the vehicle with a rich understanding of its surroundings, with multiple AI continuously checking and explaining decisions.

2. Cloud downtime parametric insurance: Parametrix & IMA team up on downtime losses.

Parametrix Insurance, a provider of parametric cloud downtime insurance, and IMA Financial Group, a North American insurance brokerage firm specializing in risk management, insurance, wholesale brokerage and wealth management, have entered into a partnership to help more companies protect themselves and their customers against losses from cloud downtime.

As a part of this partnership, IMA will make Parametrix downtime coverage available throughout its entire footprint and subsidiaries. Parametrix will integrate into IMA platforms and systems for seamless provisioning. The companies also will collaborate on marketing activities, and offer high-value consultative enterprise assessments and analysis of downtime risks and exposure.

According to Gartner, end-user spending on public cloud services will grow 20.4% in 2022 to reach $494.7 billion. In 2023, Gartner predicts it will reach nearly $600 billion. Greater dependency on cloud services means enterprises are increasingly exposed to financial risk from public cloud outages. While cloud downtime can damage a business, Parametrix’s downtime insurance policies manage the risk. All terms, including the coverage and the damages, are agreed upon in advance. The waiting period for downtime insurance can be set to as little as an hour of downtime, and there is no monetary deductible. Moreover, unlike other insurance policies, there are no restrictions on the use of funds by the insured. Because the conditions and terms of the policy are agreed upon in advance, there is no lengthy claims process to investigate the event or debate over the size of losses.

3. Renewable energy battery risks in the spotlight: Marsh, Tokio Marine Kiln, and MS Amlin introduce risk management solutions.

Marsh, has launched a new renewable energy facility that provides streamlined, dedicated insurance capacity for mid-scale solar and battery energy storage system (BESS) risks in the US and Canada.

Per Marsh, battery energy storage systems (BESS) have been in the news after being affected by a series of high-profile fires and represent a significant emerging risk.

Meanwhile, renewable energy companies have been challenged to find enough capacity for smaller standalone solar and BESS projects in a quick enough timeframe to satisfy developers, consultants, and financiers operating in the rapidly growing and competitive distributed energy resource market.

The facility, developed by Marsh Specialty’s Renewable Energy Practice, fills this void by providing expedited policy issuance and uniform terms and conditions through forms tailored for risks of mid-scale solar and BESS projects – those with capacity under 50 megawatts. The facility is backed by a panel of A-rated carriers and offers pre-agreed coverage terms for construction all risk, operational all risk, general liability, and excess liability insurance, either as a package or individual coverages. Renewable energy clients can purchase replacement cost and business interruption coverage for any qualifying project and up to $25 million in liability through the facility.

Other firms are also focusing on this area. MS Amlin Underwriting Ltd. (MS AUL), the Lloyd’s re/insurer, announced a partnership with insurtech Altelium to launch a client-centric BESS construction all risk and operational all risk insurance solution. Tokio Marine Kiln has also partnered with Altelium to offer a data-driven BESS warranty program.

Altelium provides battery insurance, warranties and fire risk consultancy for energy storage and electric vehicles.

4. AI risk management: Munich Re offers new validation service for trustworthy AI.

Munich Re is enhancing the acceptance of artificial intelligence with its new CertAI validation service.
CertAI validates fully fledged AI systems or AI solutions already in productive use. It analyzes these solutions on the basis of six different factors – fairness, autonomy and control, transparency, robustness, functional and cyber security, and data protection. For this purpose, Munich Re has pooled its risk expertise in the area of traditional industrial insurance and new technologies with the experience of the Swiss certification company CertX.

CertAI is the result of Munich Re’s global innovation activities and was developed in the company’s own venture building and incubation programme. The risk service is the second AI product Munich Re has cooperated in, after aiSure™. Whilst CertAI can help to define whether AI systems meet the requirements regarding trustworthy AI, aiSure™ focuses on the performance of these systems and covers the financial costs resulting from the reduced performance of an AI application. Both products complement each other by addressing different client needs.

5. Intellectual property risks: Tokio Marine Kiln launches IP Abatement insurance for US SME market.

Specialist insurer Tokio Marine Kiln has launched Intellectual Property Abatement insurance for clients in the US. The product will be available for Micro-Enterprise and Small to Medium size clients with revenues under USD100m.

Per TMK, the product complements the existing IP Infringement Defence solution, which has been a core offering in the US for almost a decade. The abatement add-on product will cover legal representative’s fees and legal expenses incurred by organizations seeking to protect their filed intellectual property rights and will feature coverage limits of up to $3 million.

The product sheet cites options to provide coverage for all types of IP including, but not limited to; patents, trade marks, trade secrets, designs, domain names and copyright. Risk covers include Infringement Liability, Indemnified Party Infringement Liability, Abatement (enforcement) and Rights Protection.

Future Innovation – Research & Ventures