Grow your business by boosting consumers' financial resilience with parametric insurance
Financial resilience in times of COVID-19
The current pandemic shows the devastating impact a catastrophe can have on individuals, families and companies. Our daily lives have changed drastically, with some of the usual freedoms now being a luxury. Many have lost their jobs, family members or even both. The crisis also highlights the limited financial resilience we live with. In the U.S. only half of the adults say that they would have enough emergency funds to cover three months of expenses. In Brazil the number is lower - only 28% of the adult population would be able to cover an unexpected expense equal to their monthly income.
Unfortunately, the virus does not stop hurricanes or floods from happening. In this context, it is even more striking that in 2019, 63% of the economic losses due to natural catastrophes remained uninsured. This leaves a big part of households and businesses – that have already been drained by COVID-19 – even more vulnerable and opens new opportunities for insurers to support.
Parametric insurance – a simple way to cover emergency expenses and grow your business
How can insurance support families and SMEs quickly, when the disaster strikes? Parametric insurance has proven to be a valuable product to complement traditional insurance products or cover the gaps where such products are not available or unaffordable. It is therefore a great way to broaden and grow your book. Parametric policies pay-out within a few days after a natural catastrophe hits, helping people and businesses to get back on their feet after such a turbulent event faster. This is possible since the pay-out is based on an index – a measurable figure that correlates with the potential loss. The customer receives a pre-defined pay-out based on the agreed measure, such as windspeed or shake intensity at his location. Parametric insurance can easily be adjusted to the client's need and is simple and transparent for the insured and insurer.
Parametric products can easily be distributed and sold through digital channels. Swiss Re created an IT platform to fully leverage this kind of insurance. This platform ensures full speed and transparency by automatising the entire insurance process from quoting to pay-out. The ability to settle claims without visiting an affected site in person helps maintain hygiene standards while also keeping claims adjustment costs at bay.
Swiss Re – your parametric expert
Working together with classical and alternative data providers, Swiss Re can help you create sophisticated indexes to cover your client's needs. From emergency cash relief for homeowners in case of an earthquake, to sophisticated multi-trigger non-damage business interruption products for corporates in case of a hurricanes or floods – we are happy to create the right product with you to grow your business, make your claims process more efficient and future-proof your business.