Parametric Insurance Developments
Recent developments in the parametric insurance space include AXA’s fizzy, IBM’s Weather Company insurance solutions, CCRIF SPC’s Aggregated Deductible Cover, delayed flight insurance service by Swiss Re, Etherisc’s Flight Delay Dapp and Etherisc’s Crop Insurance Application.
AXA’s fizzy, IBM’s Weather Company insurance solutions, Etherisc’s Flight Delay Dapp and Etherisc’s Crop Insurance Application are implemented using blockchain technology. Some startups in the parametric insurance space include Etherisc, Factom and Rainvow.
Recent Parametric Insurance Developments from Established Companies
Fizzy by AXA
Fizzy is a platform for parametric insurance against flight delays using blockchain technology. It uses the Ethereum blockchain to record the purchase of parametric insurance policies and pays compensation automatically to customers in the event of a flight delay. AXA is presently test running fizzy. It currently covers direct flights between Paris Charles de Gaulle airport and the United States.
IBM Weather Company insurance solutions
The IBM Weather Company insurance solutions deliver predictions, real-time alerts, and facilitate planning for seasonal events by insurers and businesses. Following an incident, the Weather Company plays the role of a third-party ledger and ascertains the event using accurate data analytics.
Historical data API’s can be easily used to create forecasts for parametric contracts using History on Demand Data. The “IBM and Maersk demo cross-border supply chain solution on Blockchain Hyperledger” is a recent application of IBM’s parametric insurance blockchain technology.
Delayed flight insurance service by Swiss Re
In partnership with Microsoft and Codit, Swiss Re introduced a parametric flight delay insurance service. It involves the use of flight data from FlightStats.
ADC by CCRIF SPC
The Aggregated Deductible Cover (ADC) is a new insurance product feature introduced in the 2017/2018 policy year for earthquake and tropical cyclone policies. The ADC is similar to a reserve fund dedicated to providing minimum payments for incidents that are not objective enough to initiate a CCRIF policy.
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) was established in 2007 as the first international risk pool. It was the first insurance facility to create successful parametric policies with the support of several traditional and capital markets. The facility was reconstituted in 2014 into a segregated portfolio company (SPC) to explore new geographic locations and products. It is now known as CCRIF SPC.
CCRIF was created under the technical supervision of the World Bank with support from Japan, Canada, EU, UK, France, Ireland, Bermuda, the Caribbean Development Bank and membership contributions from the participating countries.
Startups in the Parametric Insurance Space
Etherisc is a decentralized insurance startup platform. It uses Etheriums’s blockchain technology to facilitate more efficient, cheaper, more transparent sales, purchases and automated payouts of insurance policies.
Etherisc offers several parametric insurance products using blockchain technology. These include The Flight Delay Dapp and Crop Insurance Application introduced in 2016.
Etherisc was awarded the "Most innovative blockchain startup" by the Cointelegraph in 2017. The award is usually referred to as the "Blockchain Oscar".
Rainvow is a product-creating startup which can be used to generate cross-border risk pools, providing access to its exchange protocol to people globally through via digital currencies. It uses the Ethereum platform to facilitate customized parametric insurance policies which can automatically pay compensation for unanticipated transportation costs due to rains.
Factom is a platform-creating startup which can facilitate the creation of specific parametric insurance policies. It can assist third-party administrators to generate oracles or triggers for smart contracts thereby making it easier for insurance companies to adopt parametric insurance.
AXA’s fizzy, IBM’s Weather Company insurance solutions, Etherisc’s Flight Delay Dapp and Etherisc’s Crop Insurance Application are recent developments in the parametric insurance space using blockchain technology. Etherisc, Rainvow, and Factom are some startups in the parametric insurance space.