Insurtech (2024)

1. Rise of parametric insurance

   Climate change is creating a property insurance crisis in some parts of the world — insurers have been forced to come up with new offerings.

   Unlike traditional products that link a claim with actual losses, parametric insurance payouts are triggered by a predetermined parameter.

   How it works: a farmer and insurer, for example, could agree that three inches of rain falling in an hour is the threshold that would lead to payouts.

   Luxembourg-based Ibisa raised $3m this year for parametric insurance products. Across the pond, we saw New York-based Arbol raise a $60m Series B funding round earlier this year, co-led by London-based Giant Ventures and the VC arm of French bank BNP Paribas.

2. Automating the underwriters

   London-based Hyperexponential is one of several new businesses hoping to automate the underwriter’s workload — specifically, the data input and analysis bits.

   Artificial Labs, also London, offers fully automated underwriting for certain policies and digital triaging for others.

   The promise of new automation and AI tools is that they will save insurers significant time — London’s FloodFlash, for example, talks about how it settled a commercial property flood claim in 9 hours and 44 minutes without its employees leaving their desks. That process typically takes months, and many businesses fail during the lengthy wait for reimbursement.

3. AI’s threat to insurance

   AI’s ability to process large amounts of climate data and simulate interactions between different weather patterns make the tech extremely useful for insurers.

   But it also poses challenges to the industry, including the risks of "deepfake" fraudulent claims and of the exclusion of potential customers by AI models.

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