The Product Innovation Facility group was formed as a means to ‘modernise’ the insurance market and develop adaptive new products. It is led by senior underwriters from the likes of Tokio Marine Kiln, Beazley, Hiscox, Axis Capital, Aspen and Munich Re, among others. In August 2019, the syndicates pooled £100 million to help fund risk-fighting product development – doubling the funding of June 2018.
One of the ways that the new Lloyd’s group has expanded the insurance market’s risk offering is through cover against climate change. Spain’s Agricultural Association of Young Farmers, for example, has turned to Lloyd’s to help protect 22,000 olive growers from a financial hit posed by extreme temperatures. The policy purchased by these farmers states that in the event that temperatures rise to more than 36C for more than two consecutive days between April 30 and June 15 each year, the policy will automatically pay out €1,000 per hectare.
“With £100 million of capacity and underwriting expertise from across the market, Lloyd’s new Product Innovation Facility will incubate new product ideas and help ensure we continue to deal with our customers’ rapidly evolving and emerging risks,” said John Neal, Chief Executive at Lloyd’s.