Parametric insurance for earthquakes is launching in New Zealand.
Insurtech Bounce, in partnership with Lloyd's, Guy Carpenter, Marsh and Jumpstart Insurance, is behind the new product, which pays out within five days following a quake. Payments are triggered by a measured peak ground velocity of 20 cm per second or more. Coverage is in the form of a cash benefit to help quake victims cover expenses in the short term. It doesn't cover structures or contents.
"Bounce can give households and businesses confidence they will receive financial support quickly after a major quake," says Bounce founder Paul Barton. "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.”
Data powering the program comes from GeoNet / GNS Science, the New Zealand government agency responsible for measuring earthquakes. 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.
“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," says Victoria Carter, Chairman, Global Capital Solutions, International, at Guy Carpenter.
