New Zealand:Lloyd's launches pioneering parametric quake insurance policy

Lloyd's has launched a new pioneering earthquake insurance policy in New Zealand, in partnership with insurance start-up Bounce, which uses cutting-edge technology and real-time GeoNet data to automatically pay customers within five days following a strong earthquake.

The new policy, called Bounce, is designed to provide New Zealanders with affordable earthquake insurance and fast claims payments, to support customers’ needs following an earthquake and quickly cover immediate expenses incurred. It does this by tracking Peak Ground Velocity (PGV) which triggers payment at levels of 20 cm per second and above. Bounce is developed by the founder, Paul Barton, in partnership with Lloyd’s, Guy Carpenter, Marsh, and Jumpstart Insurance.

Bounce does not replace conventional earthquake insurance that covers significant loss, but is designed to provide immediate cash flow to cover a wide range of miscellaneous expenses to kickstart financial recovery. This new insurance solution works alongside conventional products to offer accessible earthquake insurance, with low monthly premiums, providing customers and their communities with financial resilience in the immediate aftermath of an earthquake.

The product uses data from GeoNet / GNS Science, the government agency responsible for measuring earthquakes, to objectively identify areas where customers have experienced a strong earthquake. This removes any potential conflicts of interest and provides transparency to customers on the data used and reliability of the product.

Payment eligibility is based on shaking intensity; If the customer’s location is subject to shaking with a PGV of at least 20 cm per second, that would qualify as being eligible to receive payment within five days. Claim payments are based on the strength of any earthquake, with payments based on ‘steps’. This means that the stronger the earthquake the more of the cover is paid out.

Source: Asia Insurance Review

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