Challenge
A team responsible for strategic growth at a London Market insurance firm seeks to launch new insurance products. Offering more products helps the insurer to grow its revenue, diversify its underwriting portfolio and shrink the global insurance protection gap.
The team noticed some of its market peers had recently begun underwriting parametric insurance. They wanted to understand whether their organisation could benefit from introducing parametric products and which ideas would be most suitable.
Initial research suggested there were dozens of mostly unfamiliar MGAs, technology providers and data companies specialised in different areas of parametric insurance. The small team wanted to avoid spending weeks researching products and meeting companies. They needed to focus their resources on the ideas most likely to bring a return on investment.
Solution
The insurer arranged a briefing from InsTech’s research team to discuss the opportunities in parametric insurance. Beforehand, we had a quick call to establish what the team already knew about parametric and whether there were specific areas to focus on or exclude based on the company’s risk appetite.
We came to the insurer’s office for the briefing, to which the team had also invited other interested colleagues. The discussion and Q&A covered case studies of successful parametric products, new product concepts for emerging protection gaps, the approaches of the insurer’s market peers to parametric and the challenges faced by some parametric products to date.
The meeting helped to refine the insurer’s parametric product strategy, identifying opportunities with the most potential for premium growth within its risk appetite. We recommended a shortlist of companies that were most suitable to provide the insurer with the data they required to underwrite a new product, as well as the distribution partners they would need to take it to market.
We also sent relevant materials with more details on these companies and the trends discussed, including podcast interviews, written reports and insights from InsTech’s ATLAS database.
Result
The team at the insurer identified which companies in the shortlist it would like to speak to. InsTech directly introduced them to relevant senior individuals at each company.
Now the insurer has agreed a partnership with one of these organisations. It has decided what type of parametric cover it will underwrite, determined a distribution strategy and is working with its partner to finalise the technical and regulatory details to bring it to market.
When the new product is launched, we will share the press release in our fortnightly Parametric Post newsletter. Its audience of parametric insurance professionals includes brokers, who read the newsletter to learn about new products like these that could solve problems for their clients, and reinsurers, who could support this product with additional capacity as it grows.
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