The advantages of parametric insurance solutions

Parametric insurance represents a significant innovation within the global insurance landscape. It operates on predetermined parameters and metrics, utilising big data and mobile phone technology to offer dynamic and immediate solutions. This innovation is reshaping the traditional insurance sector by automating and expediting the claims process, resulting in enhanced customer satisfaction. 

Blink Parametric discusses the benefits of real-time digital assistance through a combination of parametric triggers and resolutions. Their offerings include solutions for travel insurance such as flight disruption and lost luggage coverage. 

Carl Carter, chief commercial officer at Blink Parametric, elaborates on the functionality of their parametric travel insurance propositions and the underlying technology driving them. 

Real-time digital assistance

Real-time digital assistance is achieved through a platform designed to integrate various real-time big data feeds via API. This enables the ingestion of data from multiple sources, such as flight delay reports, allowing continuous monitoring of flights worldwide. Customisable algorithms, business rules, and logic then determine the appropriate resolution when an eligible delay occurs, streamlining the assistance process.

Parametric insurance eliminates much of the paperwork and manual processes associated with traditional insurance claims, leading to faster payouts and resolution times. This speed and efficiency are particularly valuable in situations where immediate assistance is critical, such as natural disasters or travel disruptions.

To streamline the assistance process, Blink Parametric employs business rules, which establish a relationship between design intent and response. These rules encompass data logic, underwriting, risk assessment, communication, payment management, and third-party integrations.

Benefits of parametric insurance

With parametric insurance, payouts are based on quantifiable metrics rather than subjective assessments, increasing the accuracy and transparency of the claims process. Policyholders can have confidence in the fairness and consistency of the system, knowing that payouts are determined objectively based on predefined criteria.

Core resolution options for travellers experiencing delays include real-time cash payments, personalised airport lounge access, and arrangements for hotel accommodation or flight rebooking for extended delays, all of which are customisable based on partner preferences.

Parametric insurance solutions are highly customisable, allowing insurers to tailor coverage to the specific needs and preferences of their clients. This customisation enables parametric insurance to address a wide range of risks and scenarios, from weather-related events to market fluctuations.

For example, Blink Parametric’s flight disruption solution operates by monitoring registered flight details in real-time. Upon disruption meeting pre-set parameters, travellers are automatically notified and presented with service options, including automatic delivery of airport lounge access or immediate cash payouts. In the event of trip cancellation, Blink Parametric can facilitate cash payouts or alternative flight arrangements.

By leveraging big data and advanced analytics, parametric insurance enables insurers to better understand and manage risks. Real-time monitoring of relevant data streams allows for early detection of potential threats, enabling proactive risk mitigation measures to be implemented.

Parametric solutions excel in the travel sector due to their ability to resolve issues in real-time, providing timely assistance to insured travellers. This transformative capability benefits both the insurance industry and policyholders alike.

Image: Carl Carter, chief commercial officer at Blink Parametric

Guest Post This post was created just for Claims Media by a guest contributor.