In less than one year, the insurance industry and business have learned what several of us have been saying for years. The Business Interruption, Extra Expense, and true financial losses from that is taken greatly for granted.
Business owners here and around the world, were shocked to find out that the insurance they paid for age believed they had may have in most cases nothing more than a piece of paper.
When we started to figure out how to provide our Covid relapse insurance program, we learned very quickly from speaking with dozens and dozens of Insurance folks here in the US and around the globe, that all the all the underwriting in the world didn’t prepare insurers to truly address claims the way they should be. The solution is fixable, but currently relies on the non Traditional Capacity world of Captive Insurers, and most recently those in the ILS market (Insurance Linked Securities).
As a Captive insurance who was already paying claims, the team who handle Victoria, made the decision that Business interruption as so many have come to define it, needed to change.
Yes. We had and still have to educate the masses, why business interruption and extra expenses can no longer be this arbitrary decision, it needs to be “moment in time” based. It needs a true trigger, fixed limit, and how that gets paid out. Clearly that aligns with the Parametric thought process that we have been using for certain circumstances for nearly 20 years.
But just as important is the need to align with true Indemnity based claims processing. Of course by tying the two together and using the latest technology for efficiencies we can create the right solutions that both provide the protection an insured needs, and the profitability an insurer should be entitled to. And yes, that means it can be a win win for everyone.