Lloyd’s insurer AEGIS London has announced the launch of a new parametric insurance product that is designed to protect small businesses against economic losses following a shooting or malicious incident within 250m of their premises.
The product is targeted initially at SME businesses in the Dallas area for portfolios of up to 10 properties.
INSDEX Active Response, which is distributed through partner brokers and in time via AEGIS London’s Opal platform, has been developed in conjunction with Skyline Partners, a recent graduate of the Lloyd’s Lab.
Skyline’s parametric platform monitors open-source data from the Dallas Police Department to identify when a triggering event has taken place.
Within 48 hours of relevant data being published by the Dallas Police, policyholders will be notified that an insured event has occurred and asked to confirm that, as a consequence, they have suffered a loss.
AEGIS London aims to make payment no longer than 14 days and will offer limits of up to $50,000 per event, or a maximum of $500,000 per policy holder.
“SMEs are typically the most financially exposed to this type of crime,” said Calum Williams, Terrorism Underwriter at AEGIS London. “They are often uninsured and can be faced with substantial legal and medical costs if victims or their families make a claim against them after a violent incident on or near their property.”
In addition, if their reputation suffers or trading is reduced following an event of this kind, many will face an insurance gap, particularly as some intangible assets are difficult to claim for under traditional insurance policies. Even those with insurance often have high deductibles because events of this nature have become so commonplace,” Williams continued.
“This policy provides clarity of cover, but most importantly pays out quickly after an event significantly reducing the expected adverse financial consequences. This means that insureds are given much needed liquidity at a time of need.”
Depending on how the product performs in Dallas, AEGIS London may roll it out to other states with California and Florida the next on the list, due to the high number of shootings in these regions, as well as their sufficient history of publicly-available police data.
“This parametric insurance product utilises independent and trusted third party data available from the police department’s incident database,” said Skyline co-founders Laurent Sabatié and Gethin Jones.
“The availability of this data has enabled us to create a parametric index and model the risk and price the product at 60 meters (200 feet) resolution for the whole of Dallas utilising data science and actuarial techniques. We also monitor the claims and provide notifications to brokers that an insured event has occurred as soon as the data is made available from the police department,” Sabatié and Jones explained.
“The product is proof of our structuring capabilities, INSDEX technology and innovative approach to developing new parametric products for new markets. We were thrilled to work with Calum Williams and the AEGIS London team on this exciting new application and look forward to expanding the scope of coverage to other Cities and States in the US.”
