Lloyd’s has announced a new “first-of-its-kind” BI policy for small and medium sized enterprises (SMEs) specifically designed to protect them against IT disruption or downtime.
John Neal, Lloyd's CEO, announced on 30 September "This week we were delighted to announce the launch of a new “first-of-its-kind” business interruption policy for small and medium sized enterprises (SMEs), specifically designed to protect them against IT disruption or downtime.
The new product is led by Tokio Marine Kiln (TMK) and supported by other members of Lloyd’s Product Innovation Facility including RenaissanceRe.
Created by Parametrix Insurance, it is the first off-the-shelf parametric IT downtime policy tailored towards SMEs, offering simple and reliable coverage using a parametric trigger, meaning that the policy automatically pays out if a customer’s critical IT services – such as cloud, e-commerce or payment systems – are disrupted.
Parametric insurance covers a specific event that can trigger a claim payment based on metrics from a recognized source such as the Richter scale for earthquakes or the number of hours a plane is delayed. This should reduce the time spent by insurers assessing a claim.
Tom Hoad, Head of Innovation at Tokio Marine Kiln and Chair of the Product Innovation Facility, added: “Third party cloud service providers help our clients trade within an ever-changing world and Parametrix have done a great job in developing an insurance product that helps build resilience in this space. We hope that the PIF BETA (comprising TMK, RenaissanceRe and others), which is supporting Parametrix Insurance with underwriting capacity, continues to be an effective accelerator for other technology-driven product solutions.”
Parametric insurance is an example of where data and technology and insurance can come together to create innovative products.