Lloyd’s has announced the launch of a new parametric earthquake insurance policy in New Zealand designed to automatically pay customers within five days following a strong earthquake.
The product has been developed in partnership with insurance start-up Bounce and leverages cutting-edge technology and real-time GeoNet data to track Peak Ground Velocity (PGV) and trigger payment at levels of 20 centimetres per second and above.
Payment eligibility is based on shaking intensity; If the customer’s location is subject to shaking with a PGV of at least 20 centimetres per second, that would qualify as being eligible to receive payment within five days.
Claim payments are based on the strength of any earthquake, with payments based on ‘steps’. This means that the stronger the earthquake the more of the cover is paid out.
Lloyd’s says Bounce does not replace conventional earthquake insurance that covers significant loss, but is designed to provide immediate cash flow to cover a wide range of miscellaneous expenses and kickstart financial recovery.
“Lloyd’s has a long and proud history supporting New Zealand by insuring some of its greatest assets and innovations, through to some of the most destructive earthquakes this impressively resilient nation has withstood, particularly over the last decade,” said Lloyd’s CEO John Neal.
“We’re thrilled to be able to step up and provide a technologically sophisticated and innovative earthquake insurance product, Bounce, which will provide customers with much needed support and financial resilience in the immediate aftermath of an earthquake.”
Victoria Carter, Chairman, Global Capital Solutions, International, at Guy Carpenter said, “The launch of Bounce is a hugely significant development for the New Zealand insurance market.
“This pioneering coverage has the potential to generate considerable societal benefit through providing individuals and communities with the financial resilience to address future earthquake events.
“It demonstrates once again the pioneering approach of Lloyd’s, and Guy Carpenter and Marsh are extremely proud to have played a key role in bringing this new product to market.”
Paul Barton, Founder and CEO, Bounce added, “Bounce can give households and businesses confidence they will receive financial support quickly after a major quake.
“A wider benefit of our mission, to help Kiwis bounce-back quickly, is that more money flows into our communities when they need it most. We have partnered with world leaders in insurance, but we are still very much a Kiwi company focused on Kiwi solutions.”