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RPC Insurtech in brief – December 2020

15 December 2020. Published by Neil Brown, Partner and Lauren Murphy, Associate

Welcome to the latest edition from RPC Insurtech in brief providing you with a handful of snappy monthly updates from the industry.

1. Praedicat develops insurance tool for COVID-19 liability

Praedicat, the liability modelling firm, has developed a tool that enables insurers to track exposures, establish reserves and manage aggregations against emerging risks such as the COVID-19 pandemic. 

The suite of scenarios are designed to help insurers understand clash risk from COVID-19 that impact general liability and directors & officers liability within an insurer's portfolio.  

'Clash': the situation where one underlying event causes multiple claims which can threaten the solvency of insurers. 

COVID-19 creates clash risk for casualty insurers both within and across lines of insurance.  

Praedicat applies previous mass litigation precedents to anticipate how COVID-19 liability could develop. The clash scenarios include loss estimates allocated to companies that may be named in litigation and to the insurance line that would cover the loss, enabling insurers to estimate exposure in their own portfolios. 

2. Insurtech Blink launches non-damage business interruption parametric solution 

Irish insurtech Blink has launched a hurricane non-damage parametric insurance solution designed to minimise overall claims totals as a direct result of early intervention by providing liquidity to small and medium-sized businesses in the immediate aftermath of a natural disaster. 

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It uses automated financial validation and immediate pay-out solutions to enable businesses to bounce back after a natural disaster occurs.

Amongst other processes, Blink operates by continually monitoring national weather systems, tracking hurricane formation, confirming whether the insured party was in a hurricane path and validating business impact by tracking business activity. 

The product was developed in the Lloyd's Lab Innovation Accelerator Programme. 

3. Digital Lloyd’s syndicate Ki goes live with list of broker trading partners

Ki, the first fully digital and algorithmically driven 'follow-only' Lloyd's syndicate announced the onboarding of its first trading partners to its proprietary digital platform, providing access to its algorithmic underwriting in readiness for writing business from 1 January 2021. 

Ki is working with a leading group of Lloyd’s brokers including Aon, Aon Re, BGCI (including Ed and Besso), Bishopsgate, BMS, Gallagher, Guy Carpenter, Howden, Lockton, Lockton Re, Marsh, Miller, Price Forbes, AmWins / THB, Tysers, Willis, Willis Re.

Ki has agreed to provide valuable capacity to each trading partner in 2021, giving their clients immediate security about placing business in Lloyd’s in 2021.

Ki's algorithm enables it to evaluate Lloyd's policies and automatically quote for business via a digital platform which brokers can access directly. Ki aims to increase responsiveness and drive efficiencies by reducing the time and effort taken for brokers to place their follow capacity.

4. Usage-based insurer Metromile to become public company

Metromile Inc., the U.S. pay-per-mile auto insurer, has reached a deal to go public by merging with Insu Acquisition Corp. II (Insu II), a U.S. special purpose acquisition company.  

The merger means Metromile will become a publicly listed company without the risk of an IPO. It is anticipated that the transaction will provide Metromile with up to approximately $294 million of cash to pursue growth opportunities. 

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5. Lemonade to start selling term life insurance

Lemonade plans to start selling term life insurance. Whilst the insurtech carrier confirmed it is not going to underwrite the life insurance product, its distribution broadens Lemonade's product offering from just property/casualty insurance for the first time.

The term life insurance product will be written on an undisclosed carrier’s paper as a “form of market research.” 

"We strive to prioritize product launches based on customer needs rather than regulatory frameworks, which is why over the past few months we have created the Lemonade Life Insurance Agency and why we are planning to bring the Lemonade experience to the term life insurance market in the coming months." - Shai Wininger, co-founder and COO of Lemonade

Lemonade started up in 2016, initially offering homeowner's and renters' insurance in the US, combining AI and behavioural economics. Lemonade has digitised the entire insurance process: Maya, the AI bot collects information from potential insureds, issues quotes and processes premium payments; AI bot Jim handles claims (you can even record yourself speaking into the camera and explain the claim, rather than filling in forms); and CX.AI answers customer questions.