‘Immense potential’ for parametric insurance in UK market

There is “immense potential” for parametric insurance in the UK as satisfaction levels associated with the product are “so high”.

That was according to Blink Parametric chief executive Sid Mouncey, who said that the insurtech was making “good progress” in the UK market due to its use of parametric models.

Parametric insurance is where the trigger and claims payout are preset, meaning claims processing time is reduced.

Blink Parametric uses the model to specialise in high frequency, low value claims across the travel sector.

Mouncey said the UK parametric market had some of the “world’s finest insurtech innovators operating in its space”.

”There is a concerted and necessary effort to continue to educate, build awareness, demonstrate powerful use cases and articulate how accessible parametric is as an integrated solution for the insurance industry,” he added.

”It helps enormously that the satisfaction levels associated with parametric are so high and with each incremental step, the data just continues to prove its measurable value.”

Travel

Blink Parametric uses a parametric as a service (PaaS) solution – this means insured travellers who register their flight schedule will get compensation should a delay or cancellation occur on an outward, connecting or return flight.

Mouncey felt such models were becoming key with the travel sector experiencing ”increased disruption events since the return of air travel post Covid”. 

For example, in August 2023, UK passengers were hit with flight delays and cancellations due to a technical failure that meant controllers were not able to automatically process flight plans.

And Mouncey felt that travel parametrics for disrupted flights will be adopted by a number of UK brands in the first half of 2024.

”UK insurers increasingly need to fill gaps in their traditional insurance products to handle this increase in disruption and the demand for support during large-scale surge events,” he said.

”First responder-style insurance support in times of emergency, such as real-time payouts, liquidity and rapid claims resolutions plays to the strength of parametric technology and any insurer without such an efficient tool in their arsenal will be at a distinct disadvantage.”