Welcome to our Newsletter for July 2023 and a big welcome to our new customers.
In our last Newsletter we talked about the hardening in the insurance market and the impact that this is having on affordability. At the same time we are also witnessing the impacts of Cyclone Gabrielle and Auckland Floods on impacted households and businesses as they engage with their insurance providers and navigate EQC and Local Council requirements. These are challenging events and our very best wishes and thoughts go out to all those affected. These events highlight the importance of having traditional indemnity insurance, but it also highlights the gaps in our traditional response and the failure of these policies to support the short-term and immediate financial needs of customers who are working through a crisis. This is where parametric insurance can really help as these products are designed to overcome the constraints of traditional policies by providing cash within days to support customers after an event.
I am often asked, “why focus on parametric insurance - aren’t we already well covered”? Parametric insurance plays a very special role in a crisis by deliberately seeking to support customers in the early recovery phase by providing an upfront claim settlement within days of a crisis event.
Taylor Swift fans managed to move the earth and cause a 2.3 magnitude earthquake in Seattle. What events in New Zealand have resulted in fan-based quakes?
I was recently asked by a customer to explain the value of insurance. The client understood the protections and benefits provided by insurance, but they were really keen to better understand how to unpack the concept of “value” embedded in an insurance policy. This is a tough question because the answer extends beyond the financial value of an insurance policy, to our appetite for risk and our mindset in knowing that we are fully covered.
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For me the question about “value” is predominantly about policy response at claim time. I also think that “value” is reflected in our risk appetite and the comfort that we get knowing that we are “covered”.
We can’t predict earthquake events but we can take measures to be prepared. What makes a “big” earthquake, what past earthquakes have we experienced in New Zealand, and where might the next ‘big’ earthquake occur, and when?
It now includes an explanation of parametric insurance, why customers need it, who needs it, and how it works. It also includes a snapshot looking at how responsive Bounce would have been to past earthquake events.
Please feel free to share this Newsletter with your friends and family and please don’t hesitate to reach out to me with any questions.
Thanks for your ongoing trust and support.
With warmest wishes of health and safety.
Ngā mihi
Paul
