Lloyd’s of London (Lloyd’s) has released two new reports – one on smart contracts and another on parametric insurance – that identify how insurers can offer customers better products
The first, titled Triggering Innovation – How smart contracts bring insurance to life, details how smart contracts ─ contracts that are either totally or partially automated by computer code – can reduce the time taken to issue a customer with a policy and pay out for a claim, while also carrying out risk placement, premium placement, warranty enforcement, claims assessment and settlement.
“While smart contracts are a nascent technology, they offer exciting potential to transform the customer experience,” said Trevor Maynard, Lloyd’s Head of Innovation.
And indeed, the report offers four practical applications for smart contracts in the cargo, contingency/aviation, agriculture and property catastrophe classes, and shows how full claims and/or workflow automation could be applied to further classes in the Lloyd’s market.
The parametric report, titled Triggering Innovation – Parametric insurance, which is exclusively available to Lloyd’s market partners, identifies similar benefits and also contains three case studies (which are available to everyone) that demonstrate how Lloyd’s parametric policies are helping agricultural producers in Europe, the UK, and the US to manage the risks to their business.
Caroline Dunn, Lloyd’s Head of Class of Business, commented: “Lloyd’s welcomes the underwriting of risks on a parametric basis for a diverse range of classes of business for a variety of customers, including re-insureds, as well as personal and commercial lines’ customers. We have worked to provide Lloyd’s market participants with a thorough insight into the parametric insurance market, including legal considerations, design features and the applicability of parametric products within Lloyd’s.”
Access the full reports here.