Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Coronavirus Shutdowns Emphasize Agencies’ Need for Digital Tools. This week we’re bringing you: Insurtech to Launch Parametric Pandemic Insurance Product
Despite worries over coronavirus, most people booking travel don’t plan to buy trip insurance, survey finds*
More than half of U.S. travelers planning to book trips will not insure their purchase, according to a survey of more than 1,200 Americans by ValuePenguin.
That’s despite the near-shutdown of global tourism, the struggle to get refunds on canceled spring and summer travel plans, and lingering questions over how and when airlines, cruise lines, hotels, theme parks and other travel industry sectors will get back up and running at full steam.
“Travel insurance is a tricky thing,” said ValuePenguin travel expert Brett Holzhauer. “If your travels have never gone wrong, you’re not really inclined to buy it.”
But due Covid-19, more people are realizing it can help, he said. Among those now planning some travel, 23% will definitely buy insurance and 21% may do so, ValuePenguin found. Read more in-depth here.
COVID economic fallout likely to boost M&A insurance claims: Aon*
Economic fallout from COVID-19 is expected to result in an increase in claims filed under representations and warranties insurance policies, Aon PLC said in a report Monday.
The prognosis came as Aon reported a steady rise in the use of representations and warranties insurance as a deal facilitator by buyers and sellers and a growing number of claims filed and paid.
Representations and warranties insurers paid out or acknowledged loss on 30% of around 340 claims made on policies placed by Aon in North America between 2013 and 2019, the brokerage said.
More than $350 million was paid out by insurers on policies placed by Aon between 2013 and 2019, the report found. Claim size trended upward in 2019, with the average payment above the policy retention nearly doubling to $10.7 million, from $5.4 million in 2017, according to the report. Read more in-depth here.
Most COVID-19 comp claims in health care, first responders*
Health care workers and those working in protective services accounted for 83.3% of COVID-19 indemnity workers compensation claims filed in Florida as of May 31, according to a report issued Tuesday by the Florida Department of Financial Services, Division of Workers’ Compensation.
The report tallied 3,807 time-off, virus-related claims filed since the start of the pandemic, totaling $3.2 million in benefits paid. It found that that 45.7% of claims came from health care workers and 37.6% from the protective services sector, which includes first responders. Read more in-depth here.
Insurtech to launch parametric pandemic insurance product*
Machine Cover, an insurtech company that creates parametric products for the insurance industry, has announced that it is developing what is believed to be the world’s first parametric-based pandemic insurance.
Machine Cover said that the COVID-19 outbreak has revealed a “critical gap” in insurance coverage, as many business interruption (BI) policies don’t cover pandemics.
“Currently available insurance products are not fit for purpose because they do not cover companies for unforeseen consequences such as unexpected shortfalls in revenues, the inability to trade, and the cost of letting go of members of staff,” said Inder-Jeet Gujral, founder and CEO of Machine Cover. “The inadequacy of BI policies has resulted in large numbers of businesses issuing lawsuits against their insurers to try to recover cash to which they believe they were entitled. In many cases, businesses have been unable to continue trading because the pandemic has resulted in shortfalls few could have foreseen.” Read more in-depth here.
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