Lloyd’s of London has rolled out a new business interruption policy, dubbed as Parametrix Insurance, for small and medium sized enterprises (SMEs).
Claimed to be one of its kind, this new policy is specifically designed to protect SMEs against IT disruption or downtime.
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It is said to replace traditional indemnity trigger used by most insurance policies with a parametric trigger and automatically pays out if a customer’s critical IT services, including cloud, e-commerce or payment systems, are disrupted.
The new product is led by Tokio Marine Kiln (TMK) with support from other members of Lloyd’s Product Innovation Facility including RenaissanceRe.
Lloyd’s noted that it is the first off-the-shelf parametric IT downtime policy designed for SMEs.
Parametrix Insurance co-founder and CEO Yonatan Hatzor said: “Businesses have shifted to managing most of their critical IT operations by using third-party service providers, thereby increasing their vulnerability to disruption.
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By GlobalData“As a result, critical technology downtime has become the fastest growing risk for businesses today, whether you are a technology company or not. On top of this, the existing claims process in the field is complicated, expensive and time consuming.
“Parametrix’s approach addresses all these issues, providing a solution that saves both time and money, while making tech insurance accessible to new business segments. We are thrilled to launch the first ‘off-the-shelf’ parametric insurance product for IT downtime.”
Lloyd’s Innovation head Trevor Maynard added: “We know that insurance products and services have to evolve to respond to the challenges of the Covid-19 pandemic and help our customers cover new or heightened risks that they may encounter now or in the future.
“That is why Lloyd’s Product Innovation Facility and our new Lloyd’s Lab cohort are both looking at ways the industry can do this more effectively. I am delighted to see evidence of this today with the launch of Parametrix.”
Meanwhile, Lloyd’s recently said it expects to pay around £5bn in Covid-19 related customer claims on a gross basis.
It posted a pre-tax loss of £400m for the first half of the year compared to a profit of £2.3bn in the year-ago period.
