Frédérique De Simone
22 February 2019 11:30
Photo : Freepik
The european insurer AXA feels currently the canadian market to establish its programme of parametric insurance.
The parametric insurance is the science that combines including weather data, satellite imagery, analysis of waves, the index of write-off and the official statistics of the countries to establish an insurance premium.
The Journal of insurance has received a presentation from the insurer on 15 February. Twenty brokers were also present at the invitation of the insurer. The presentation was made by Antoine Denoix and Karina Whalley, respectively CEO and director of business development ofAXA Global Parametrics. Urs Ulhmann, CEO ofAXA XL Insurance Canada, was also present.
Already established in twenty countries in Europe, Africa, Asia and South America, the parametric insurance is a flood of data-based indexes pre-defined, rather than on losses. As much adequate for developing countries than the developed countries, it relies largely on climate change and the variations in the abnormal mother Nature.
If the temperature crosses a threshold and the risk that it could harm crops a farmer, for example, it may compensate for the loss of evidence, without having to prove the losses or even to make a claim with his insurer. Everything is automated.
How does it work?
The insurance is designed on the basis of a parameter correlated. The payment is triggered automatically when the index reaches a level. The insurer is notified in real time and the premium is paid within a few days following the anomaly. In some cases, it is necessary to prove the loss. In other cases, not.
A bit like with the platform Fizzy AXA, designed to compensate for delays in aircraft flight and based on the technology of chain blocks, in order to ensure its effectiveness and safety. The contract smart will automatically trigger a refund as soon as a delay of two hours or more is found. This coverage is currently available on nearly 80 % of the flights in the world.
In the case of parametric insurance, the data used span a period of at least ten years, but due to climate change, the insurer focuses on a range of five years to obtain an overall picture.
It is not certain yet if the parametric insurance may be introduced in Canada. There are several factors to take into consideration, including the regulation, since the framework in insurance in Canada varies from one province to the other.
“We are currently working on the regulatory aspects and accounting in order to ensure that they conform to the canadian regulations,” said Karina Whalley, in interview to the Newspaper of the insurance company after the presentation.
For the moment, the parametric insurance serves businesses and the public sector, such as governments and some municipalities, in case of a cyclone or a natural disaster. The option to cover individuals, however, is not ruled out according to Karina Whalley.