Webinar
Case study presentations from session at ICMIF/Americas Annual Conference 2019
This session looks at innovation in terms of product design, new underwriting practices and collaboration in emerging ecosystems. These case studies focus on new product development of effective insurance solutions to address unmet insurance needs: ranging from inclusive insurance solutions to protect low income and underserved populations, to customised and non-traditional insurance products that satisfy customer needs in the fast-changing digital economy.
Parametric insurance to protect vulnerable communities from disasters
In 2018, microinsurance business was first authorised by the Puerto Rican insurance regulator. This change in regulation allowed Cooperativa de Seguros Múltiples to enter the field of parametric insurance. The primary intent of this product is to protect the low-income sectors, who are most vulnerable to losses caused by natural disasters.
Parametric coverage is triggered by the occurrence of a natural event depending on severity (e.g. hurricane category). Event severity is determined by objective information published by an independent third party. Pay-out is made according to the intensity of the event covered.
Compared to a traditional product, parametric insurance involves minimal administrative tasks and has a faster pay-out time. Coverage is usually wider (can cover uninsurable risks), can be more flexible and easier for policyholders to understand. Parametric insurance represents an additional tool to facilitate access to the benefits of limited coverage against specific risks for low-income sectors, to help them cope with the financial losses caused by catastrophic events. This product speeds up the compensation process and makes the distribution channel more flexible so as to reach the target population. In this way, Seguros Múltiples can help the communities to recover more quickly from the occurrence of a loss, fulfilling its social responsibility effectively.
Presenter:
Juan Lugo Meléndez, Executive President, Cooperativa de Seguros Múltiples (Puerto Rico)
Product innovation at The Co-operators: A tale of two products
The Co-operators was the first Canadian insurer to offer comprehensive water insurance to provide protection from the most common causes of residential flood and water damage. Prior to 2015, Canadian homeowners were unable to buy insurance to protect their home and belongings from overland flooding.
Comprehensive water insurance remains the only product of its kind in Canada (others are due to enter the market in 2020). Today, more than a quarter of a million Canadians are covered by this product. The model The Co-operators uses to predict flood risk is recognised as one of the most advanced in Canada, and incorporates data on elevation, soil, rainfall, river flow, government-controlled defences like dams and channels, and other factors that help predict areas at risk of flooding. The process for product development for this flood cover spanned over six years. It addressed an unmet need for The Co-operators’ clients, leading to strong retention and new business sales.
In comparison to this traditional product (“to be better”), in 2018 The Co-operators launched a new episodic (on-demand) insurance product for short-term rentals (non-traditional product “to be different”). The Co-operators partnered with InsurTech company Slice Labs, an insurance platform provider supporting cloud-based, on-demand digital services ecosystems, to create a new digital insurance brand, Duuo.
In September 2018, Duuo launched its first product, a pay-per-use homeshare insurance: the first on-demand insurance solution for Canadians participating in the sharing economy. Product development took three days, including a two-day hackathon. The increased speed to market required The Co-operators to use resources in a different way and created an agile and low risk environment to learn.
The development process for both these products were contrasting. The flood product was an example of incremental innovation, while the episodic product was transformational innovation. However, both products are examples of how The Co-operators is addressing the changing and unmet insurance needs of Canadians, aligning with its purpose and cooperative identity.
Presenter:
Lisa Guglietti, Executive Vice-President, Chief Operating Officer, P&C Manufacturing, The Co-operators (Canada)
NetAgro app: Product innovation in agricultural insurance
Grupo Asegurador La Segunda (Argentina) fosters innovation to improve efficiency, competitiveness and to reach its strategic goals. By doing so, it has increased its market share overall (to 5%) and has reached number one in the market for agricultural risks (21% market share).
The NetAgro app is an innovative mobile solution designed for farmers, who are able to visualise agricultural indices and calculate land area for precision agriculture. The app uses a combination of vegetation indices to analyse vegetation and soil humidity. It includes automation in its underwriting process.
The creation of NetAgro went through a number of stages: from internal discussion and technology research, to app development and implementation. The new solution has multiple tools in only one app, with the possibility of adding additional services and tools for customers. It has also acted as a new communication channel between the company and insured.
Presenter:
Matias Retzlaff, Software Engineering and Innovation Area Collaborator, Grupo Asegurador La Segunda (Argentina)
More information
If you would like more information on the topic or case studies presented above, please contact us. We are here to make tailored introductions to your fellow ICMIF members and we can also share other member-only resources with you based on your specific challenges and interests.
