Insurance Covered

Welcome to Insurance Covered. In this episode we discuss the relationship between fossil fuels and insurance. Our guest is Tom Johansmeyer, Head of Property Claims Services at Verisk insurance solutions. Tom recently had an article published in the Harvard Business Review 'How the insurance industry could bring down fossil fuels' which is what we will be focusing on today.First, we take a closer look at the article Tom wrote on the topic of ESG, fossil fuels and the role insurance can play in reducing the use of fossil fuels. The article focuses on the recent Lloyd's decision to phase out insurance for most fossil fuels by 2030. "I wanted to take a look at was the business side of that decision.Because, having looked at ESG issues in various forms over the past 15 years of my career, I've always struggled with this notion of will companies do the right thing because it's right or is there a business incentive to do so".As part of the research behind the article Tom looked at historical marine and energy losses and historical global large risk losses to see which of these are from companies directly involved in the fossil fuel business and what portion of a loss do they make up. They found that We found that around two thirds of the losses in that segment are from companies directly involved in the fossil fuel business. So this goes some way to explain why Lloyd's have made the decision they have, from a purely business orientated perspective before even considering ESG pressures. Investors want companies to be more ESG positive but at the same time they also want it to be value accretive.So the challenge is finding a way to pivot away from the fossil fuel business into another profitable market, renewables being the clear choice. "So, the challenge now is finding ways to engage insurance capital to support renewables given the transition from a difficult loss history to potentially more profitable business given the new technology that is being deployed." We then look at where the pressure to move away from unsustainable energy risks has come from. Tom explains that here has been a recent surge in importance in ESG issues, but this has been building for over a decade. This pressure to be ESG conscious is coming from investors but also regulators. Finally, we discuss what insurers can and are going to do to remove themselves from the fossil fuel industry in order to achieve the 2030 target set by Lloyds. "It's going to be a decades-long process, because there cannot be a wholesale withdrawal, partly because some of these policies are tong-term policies. There are a number of commitments that are being signed up 'the net zero insurance alliance' and the UN's principles for sustainable insurance". If insurers begin to start focusing on getting ESG favourable contingent capital, from reinsurers and IOS funds as well as making the ESG pledges and shifting away from unsustainable business lines we should begin to see ESG favourable strategies falling into place. We hope you enjoyed this episode of Insurance Covered, if you did please subscribe to keep up to date with future episodes.

Welcome to Insurance Covered. In this episode we are looking at personal accident insurance. Our guest this week is Peter Laidlaw, Head of the accident and health underwriting team at Atrium Underwriting. Peter specialises in writing a variety of risks, from K&R to our topic for today personal accident.We start by discussing what exactly personal accident insurance is and what is included within it. Peter explains that it is exactly what it sounds like, accidents or risks that put a human life at risk of injury or worse. This can include permanent disability, temporary absence from work through accident or sickness, medical expenses, critical illness. It also includes travel to dangerous areas.Peter goes on to explain that this kind of cover is often targeted towards high net worth individuals, celebrities and athletes are often the focus of these policies. We then look at a general example. If a premiership football team makes major investment to purchase a striker for £100m they would want to protect that investment. The team would take a policy out to make sure that if anything happens to that player that they basically would not lose the initial investment that they made. A policy would be written to protect against loss of value as a result of accident or injury to the player.We then look at where this kind of business comes from. Peter explains that a lot of the risks come from the US entertainment industry, for the obvious reason that it is so much bigger than in the UK. However he notes that there are still a number of celebrities and athletes on the books from outside of the US.Finally we discuss if it impacts the underwriting process when its a well known public figure. Peter explains that regardless of the individual they are seen as an asset in the same way a car or Yacht would be to prevent any kind of bias being present.We hope you enjoyed this episode of Insurance Covered, if you did please subscribe to be notified of future episodes.

Welcome to Insurance Covered. In this episode we are looking at embedded insurance. Our guest is Robin Merttens, Co Founder and Partner at InsTech London and we will be discussing a recent report published by InsTech London on embedded insurance and its current uses. We start by defining exactly what embedded insurance is. In its simplest form embedded insurance isthe bundling of insurance coverage onto the purchase of a product or service, as an optional extra. "The excitement about embedded comes from the fact that technology and data is going to enable us to sell the right piece of insurance, the right insurance product at the right time".We then look at an example, "You can see embedded insurance within invoice financing.So, the exact point now in which you produce an invoice on your Xero or Sage accounting system, you can now get pinged to say would you like to insure that invoice.It will give you a price on the spot and you can get a per-invoice credit insurance on the spot, in a way that you simply couldn't before".We then move onto the report produced by Robin that focuses on embedded insurance. The report looks at a variety of topics, posing the question 'to embed or not to embed'. It looks at what problems it is trying to achieve, areas where it can and has been a success (particularly in the Chinese market) and how insurers and MGA's can make the most of the opportunity that is embedded insurance.You can download a copy of the full report here.Finally we look at what the future of embedded insurance looks like. Robin explains that there is huge potential for growth in this area and that we expect to see more and more companies adopting the technology to facilitate the use of embedded insurance.We hope you enjoyed this episode of Insurance Covered, if you did please subscribe to keep up to date with future episodes.

Welcome to Insurance Covered. In this episode we discuss the role behavioural science can and does have in the insurance industry. Our guest is Ella Morrison, Senior Behavioural Designer at Cowry Consulting.We start by exploring what behavioural science is. "It's the study of human behaviour. It's made up of the different aspects, from cognitive psychology, social psychology, behavioural economics, neuroscience, but what it boils down to is understanding how humans make decisions and how we can use that to improve products, services, procedures, so that they're more in line with how we think". The idea that getting into the mind of the consumer, seeing their perspective can help you tailor a proposition to their specific needs and requirements, a strategy that has become increasingly popular in the last 10 years. Ella then gives some examples of how it works in a business environment. She explains the work Cowry Consulting do is working with private sector companies to develop their behavioural science capabilities internally. The idea of creating 'exceptional experiences' for both the end customer and employees. Fixing the user / customer journey, making sure that the products and the services that businesses are developing are actually in line with what motivates us and what appeals to us. We go on to look at it in the context of insurance. Ella explains Cowry Consulting have worked with a number of insurers to build their own behavioural science capabilities. She gives an example of working with Saga. "We worked with Saga in their contact centres, they were really struggling with customer retention. We needed to help the customer understand why their premiums are going up. Saga's client base is typically the older generation, so we needed to redesign the process to be user friendly and easier to understand, to prevent the customers feeling unsure and overwhelmed by the information they were being given. we wanted to make sure that they fully understood why their premiums were changing and to help them guide them to the right policy for them. So we used behavioural science to redesign the conversation so that it was clearer and easier to process, the type of content and explain the policy details in a way that they could understand." Ella goes on to explain that it's crucial to change the process to meet the customers needs rather than make the customer change to fit the process. Finally, we briefly touch on what the future of behavioural science might look like in the next 10 years. Ella believes that we will see the behavioural sciences intertwining with data science which will result in both technological and psychological innovations, for example being able to have a fully bespoke and tailored 'nudge' for each customer depending on their own personal behaviours. Ella also suggests that behavioural design will become a key part of every business, ensuing that processes used are effective in meeting the needs of customers. We hope you enjoyed this episode of Insurance Covered, if you did please subscribe to keep up to date with future episodes.

Welcome to Insurance Covered. In this episode we discuss space insurance, these policies cover and why companies take these out.Peter is joined by David Wade, Underwriter at Atrium Underwriting where he specialises in Space insurance. We discuss, the insurance of space projects, satellites and the future of space exploration.We start by talking about the history of space exploration, the key projects and achievements and where that has left us in the present day. David explains space exploration as we know it came from advancements in rocket weaponry in the second world war. Following the end of the war the science was used to create ships that could break out of the earths atmosphere with the overriding goal of exploring the solar system. David also mentions satellites, and how they are crucial to life as we know it and made fast paced communication a reality. There have been around 12,000 satellites launched and 4000 of those are currently still active. We then discuss how insurance of satellites works. David explains that some of the first satellite policies came through Lloyd's in the mid-1960s. Most of what Atrium cover is the more commercial space activity, satellites used for television and different policies are taken out at different phases of a satellites life cycle. "Typically, separate policies for each phase, so, before the satellite is launched there's a pre-launch cover that is available, this is really offered by the cargo markets.At this, at that stage a satellite is just another piece of equipment being transported from a factory to a place of use. That policy ceases when the launch cover starts, that usually really means the first year of life of the satellite.So that policy attaches at intentional ignition or lift off, or launch.So that would cover the satellite whilst it was on its, on its rocket going into space. Once that first month has passed and the satellite has been thoroughly tested and it starts commercial operations that would be a different policy".Finally, we discuss what the future of space insurance holds. David indicates that with the likes of Elon Musk and Richard Branson, commercial space travel will eventually be available to the public and with that a whole new type of space insurance policy. We hope you enjoyed this episode of Insurance Covered, many thanks to David for joining us. If you did enjoy, please subscribe to be notified when new episodes are released.

Welcome to Insurance Covered. In this episode we discuss micro insurance with Rose Goslinga, co-founder of Pula, a micro insurance company based in Kenya. We will look at why micro insurance exists and why it has become a vital source of cover for so many people in Kenya and beyond. We start by discussing how Rose found her way to founding a micro insurance company in Africa. Rose moved to Rwanda to take up a job in the Ministry for Agriculture and worked with a team to implement 'the green initiative' with plans to help farmers increase their crop yield in order to ensure there was enough food to feed them and the villages they belonged to. It was in this role the need for insurance was clear, when such investment into agriculture was highly dependent on their being a good amount of rainfall. Rose goes on to explain what micro insurance is explaining that it is exactly what it sounds like, small premiums and the limits of indemnity are also small " the average farm size that we deal with is maybe half an acre, our average premium, I think this last year, was $8". Rose goes on to explain that with the micro insurance they offer it is essentially a form of parametric insurance. To visit every individual farm would be logistically and financially very costly (and would drive the premiums up making it unaffordable to the farmers). So instead they rely on technology and sampling in different areas to provide data on a good harvest, if there have been issues (flooding or droughts for example) and pay-outs are based on data received back.We then go on to discuss how Pula 'sell' insurance policies to farmers. Rose explains it comes down to behavioral economics and the value proposition but forward. It is heavily built on trust. "You are now telling people, give me money first, and then if something goes wrong, you have to trust me but I will pay you compensation". One way Pula have sold policies is through credit providers or through fertilizer providers or seed providers that the farmers are using. Working with the companies providing the credit to build and work the farms almost mandating that they take insurance cover to protect them and the harvest should anything go wrong. We then discuss how the claims side works. Rose explains the farmers don’t make claims, the technology in place calculates claims based on historical data and sampling. If a harvest in a district in lower than historically measured a payment is calculated. If the areas have been affected by adverse weather a payment is automatically calculated and paid. As soon as a trigger happens a payment to the farmers is made. Finally, we discuss the future plans for Pula. She explains last year they had 1.7 million policies in place a number they expect to grow as they expand across Africa and beyond, with Asia and Latin America being other continents to focus on. We hope you enjoyed this episode of Insurance Covered, if you did please subscribe to keep up to date with future episodes.