Lloyd’s underwriters have launched the Product Innovation Facility – an initiative with over £100m of capacity designed to speed up (re)insurance product development for today’s new and emerging risks.
What is the Product Innovation Facility?
The Product Innovation Facility is a commitment to nurturing a “safe space” for underwriters to experiment with new ideas in a controlled way, which balances the need for appropriate oversight with the risk of not innovating fast enough.
The space will explore non-standard risks that might not fit the traditional market such as risks relating to intangible assets, new technologies and others.
Why is the Facility important?
As part of the Future at Lloyd’s ambition to be the world’s most customer-centric digital insurance platform, the Facility is an important step towards building a marketplace that offers better value for the changing and diverse needs of customers through highly-responsive, cutting-edge risk management products and services.
By thinking collaboratively, the product innovation facility allows different thinking and expertise to solve our clients’ problems.
What products has the facility developed?
The Product Innovation Facility launched its first product, a parametric profit protection policy for hotel industry, in September 2019. This new insurance product aims to protect hotels from lost profits following an unexpected market-level event that would impact their ability to trade. This is a great example of the collaborative innovation the Product Innovation Facility has been set up to support.
The Product Innovation Facility launched its second product, Coincover, in March 2020. This offers investors and traders of cryptocurrencies, protection against losses arising from the theft of cryptocurrencies held in online, or “hot” wallets. This product has a dynamic limit that increases or decreases in line with the price changes of covered crypto assets and is the first insurance product of its kind.
These are great example of the collaborative innovation the Product Innovation Facility has been set up to support.