How smart contracts and parametric insurance bring policies to life
Imagine a world where a claim is paid before the customer realises they have experienced a loss. Lloyd’s recently published vision for the future invites us to visualise a next generation claims service that offers a transparent and automated response to customer loss.
Smart contracts and parametric insurance could be applied to make this vision a reality. They have the potential to automate aspects of traditional insurance contracts including risk placement, payments, warranty enforcement, claims assessment and settlement.
With Lloyd’s market participants exploring and adopting these technologies, Lloyd’s has launched two reports that look at how smart contracts and parametric insurance can power efficiency and enhance the customer experience.
Triggering innovation: how smart contracts bring policies to life
Working with experts at the Centre for Commercial Law Studies at Queen Mary University, the Innovation team has produced a report that showcases how smart contract solutions could be implemented across a range of products and explores the technology, design choices, and legal and regulatory considerations that insurers will need to think about to make it happen.
Exclusive market only report on parametric insurance
The Class of Business team have also produced an accompanying Market Insight report accessible exclusively to Lloyd’s managing agents and syndicates. Produced in collaboration with the School of Risk Management of St. John’s University, It gives an overview of parametric insurance and outlines how the Lloyd’s market’s structure provides a comprehensive ecosystem in which parametric products can be developed.
Case studies: Parametric insurance at Lloyd's
Instant claims for earthquake damage
In earthquake-prone California, 87 percent of homeowners don’t have insurance because it is considered unaffordable.Read more
Buying protection for volatile milk prices
Stable, a Lloyd’s managing general agent (coverholder), is improving access to insurance in the agri-food sector though its parametric risk transfer solutions for farms and food buyers of every size.Read more
Protecting farmers from extreme weather
“The Chablis growing area is highly exposed to frost, which is one of my main concerns in my vineyards,” says owner Louis Moreau from the eponymous domaine.Read more