Lloyd’s and Kiwi start-up Bounce launches New Zealand parametric earthquake insurance which pays claims within five days
Lloyd’s has launched a parametric earthquake insurance policy in New Zealand, in partnership with insurance start-up Bounce. It uses real-time GeoNet data to automatically pay customers within five days following a strong earthquake.
‘Bounce’ tracks Peak Ground Velocity (PGV) which triggers payment at levels of 20 centimetres per second and above. It has been developed by the founder, Paul Barton, in partnership with Lloyd’s, Guy Carpenter, Marsh, and Jumpstart Insurance.
The product is designed to work alongside conventional products and provide immediate cash flow to cover a wide range of miscellaneous expenses to kickstart financial recovery.
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.”
The product uses data from GeoNet / GNS Science, the government agency responsible for measuring earthquakes, to objectively identify areas where customers have experienced a strong earthquake. This removes any potential conflicts of interest and provides transparency to customers on the data used and reliability of the product.
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.