Insurtech firm Yokahu has been selected for inclusion in the ninth cohort of the Lloyd’s Lab to develop a new parametric loan default protection product.
A statement from the firm said the product had been selected after a competitive pitching process. It will be embedded into, or alongside, a loan such as a mortgage. Defined weather events such as hurricanes, floods, or wildfires would trigger the insurance to cover the repayments for interest for an agreed period of time and reduce the likelihood of default.
Tim McCosh, CEO and founder of Yokahu, said: “We are delighted to be accepted into Lloyd’s Lab, a prestigious leading global insurtech accelerator. The focus for Lloyd’s Lab Cohort 9 was solutions that can help the Lloyd’s market understand customers’ risks better, respond even faster to incidents, or provide a better service to its customers.”
He added: “We feel Yokahu’s parametric Loan Default Protection is a natural fit for Lloyd’s Lab, helping solve the challenges faced for both customers and lending banks in the wake of catastrophe. Extreme weather losses are rising with climate change and when catastrophe strikes, an individual may need to divert funds they were using to repay a loan to help with their immediate recovery and rebuilding – quite understandably, repaying a loan gets put to one side when you have more immediate and urgent financial needs.”
He went on: “At the same time, by protecting and supporting their customers during such difficult periods, a bank’s own business becomes more resilient by avoiding a string of defaults. We are grateful to the Lloyd’s Lab team and those present on the pitch day for accepting our application, and we are looking forward to making a difference to everyday people’s lives as well as for businesses as we develop and launch this new product.”
Yokahu said the product will benefit customers by creating a repayment holiday after a catastrophic weather event that has placed them in hardship, protecting their credit rating while freeing up their budget for other essential costs such as rebuilding their home or business.
According to its website, Yokahu is a digital insurance intermediary working exclusively in the natural catastrophe and climate risk space. It became a Lloyd’s of London Coverholder in November 2021 and went live in early 2022.
