Frequently Asked Questions
What is Parametric Insurance?
Parametric Insurance simply offers a pre-agreed amount of cover based on the probability of a pre-defined event. That sounds a bit like typical insurance jargon but in simpler terms, the specifics of the insured event parameters are identified and the reimbursement values are determined before the cover starts. Compensation is provided when an event occurs rather than just after a loss. Parametric insurance provides cover for areas that aren’t covered or are often excluded by indemnity style policies.
The insured doesn’t have to provide proof or observe a lengthy claims process and the Insurer doesn’t need to spend resource and money on assessing claims – the data does all the hard work for everyone.
Parametric Insurance is one of the major global trends in insurance innovation. The movement towards utilising big data and mobile technology to provide new, innovative solutions is revolutionising the once traditional sector.
Why is Parametric Insurance being talked about?
Customers are demanding more from their products and services. Lack of certainty for customers/policy holders seeking advice and status updates on their claim entitlements and payouts are real challenges facing the insurance sector, particularly in the Covid-19 period.
Insurers need to keep up with the demand for fast and intuitive solutions to customer problems and as parametric combines big data, mobile tech and AI, it’s becoming increasingly accessible for Insurers to provide innovative and progressive customer experiences.
As well as benefiting the customer, this also provides Insurers with integrated digital platforms that enable faster, cheaper and more scalable solutions and communication methods.
What are the benefits for Insurers?
There are many …… of course, we would say that wouldn’t we! But parametric performance is measurable by design and offers real-time insight on claims activity with a full dashboard reporting suite.
Big data access supports real-time open banking integration, immediate impact assessment once the insured event occurs, a streamlined claims process, float management for underwriters and full reconciliation service and an unrivalled opportunity to build trust with policy holders with a superior customer service experience.
In the case of Blink Interruption, looking at RIMS Business Interruption Survey 2017, 40% of respondents experienced Business Interruption loss within 5 years. 74% of those claims took between 6 months and 2 years to settle. Consider how meaningful it is to have a parametric solution to cut the average claims process time by up to 95% and provide that precious liquidity to small and medium-sized businesses in the immediate aftermath of the insured event.
What are the benefits for Policy holders?
The Top 3 benefits are Service, Service, Service! Real-time, automated processing and pay-outs are fundamental to an effective parametric insurance offering. Combine that with a simple, at times self-serve, rewarding user experience and parametric makes sense.
Putting Blink Interruption into context for policy holders, FEMA report that following a disaster, 90% of smaller companies fail within a year unless they can resume operations within 5 days. Blink Interruption offers real-time claim activation and pay-out solutions in the immediate aftermath making it possible for businesses to recover and reopen!
Blink designs and supports solutions across its parametric platform all day every day with capacity to process more than 60,000 claims per hour.