Lloyd’s has launched a pioneering earthquake insurance policy in New Zealand, in partnership with insurance start-up Bounce.
The product uses real-time GeoNet data to automatically pay customers within five days following a strong earthquake.
The new product – called Bounce – is designed to provide New Zealanders with affordable earthquake insurance and fast claims payments, to support customers’ needs following an earthquake and quickly cover immediate expenses incurred.
It does this by tracking Peak Ground Velocity (PGV) which triggers payment at levels of 20 centimetres per second and above.
Bounce has been developed by the founder, Paul Barton, in partnership with Lloyd’s, Guy Carpenter, Marsh, and Jumpstart Insurance.
Lloyd’s claimed that the development of this innovative parametric insurance product follows the market’s commitments to remove complexity and provide enhanced coverage and clarity for their customers through simpler products.
Bounce does not replace conventional earthquake insurance that covers significant loss, but is designed to provide immediate cash flow to cover a wide range of miscellaneous expenses to kickstart financial recovery.
This new insurance solution works alongside conventional products to offer accessible earthquake insurance, with low monthly premiums, providing customers and their communities with financial resilience in the immediate aftermath of an earthquake.
Lloyd’s CEO John Neal (above) said, “Lloyd’s has a long and proud history supporting New Zealand by insuring some of its greatest assets and innovations, through to some of the most destructive earthquakes this impressively resilient nation has withstood, particularly over the last decade.”
“We’re thrilled to be able to step up and provide a technologically sophisticated and innovative earthquake insurance product, Bounce, which will provide customers with much needed support and financial resilience in the immediate aftermath of an earthquake.”
Victoria Carter, chairman, Global Capital Solutions, International, at Guy Carpenter said, “The launch of Bounce is a hugely significant development for the New Zealand insurance market.”
“This pioneering coverage has the potential to generate considerable societal benefit through providing individuals and communities with the financial resilience to address future earthquake events. It demonstrates once again the pioneering approach of Lloyd’s, and Guy Carpenter and Marsh are extremely proud to have played a key role in bringing this new product to market.”
Paul Barton, Founder and CEO, Bounce, added: “Bounce can give households and businesses confidence they will receive financial support quickly after a major quake. A wider benefit of our mission, to help Kiwis bounce-back quickly, is that more money flows into our communities when they need it most. We have partnered with world leaders in insurance, but we are still very much a Kiwi company focused on Kiwi solutions.”
The product uses data from GeoNet / GNS Science, the government agency responsible for measuring earthquakes, to objectively identify areas where customers have experienced a strong earthquake.
Lloyd’s claimed that this removes any potential conflicts of interest and provides transparency to customers on the data used and reliability of the product.
Payment eligibility is based on shaking intensity; If the customer’s location is subject to shaking with a PGV of at least 20 centimetres per second, that would qualify as being eligible to receive payment within five days.
Claim payments are based on the strength of any earthquake, with payments based on ‘steps’. This means that the stronger the earthquake the more of the cover is paid out.