Lloyd’s has unveiled the insurtechs that’ll take part in its fifth accelerator program. We think it’ll help plug the early stage insurtech funding gap, while also helping incumbents accelerate their responses to novel risks, such as the pandemic.
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The Lloyd’s reinsurance market has chosen 10 insurtechs to participate in its fifth Lloyd’s Lab innovation accelerator program, Insurance Journal reports. Lloyd’s received over 140 global applicants for the virtual pitch event in July and will commence the virtual Lloyd’s Lab in September.
The 10 successful insurtechs will focus on three key themes: data and models, new insurance products, and COVID-19 response — below are a few of the selected insurtechs we think have the capabilities to help fulfill these objectives.
Thimble is a US-based insurtech geared toward flexible coverage for small businesses, which have been hit hardest by the pandemic. Thimble offers small businesses flexible, on-demand insurance coverage for as short a period as 1 hour. It’s developing nascent business interruption coverage to protect small businesses from the current and future pandemics.
Blink Parametric offers a series of parametric products that are malleable to the pandemic’s characteristics. The Ireland-based insurtech offers travel and climate risk parametric products: Parametric insurance helps protect against unpredictable risks, filling the coverage gap that incumbent insurers struggle to cover with their traditional models. It covers payout according to predefined parameters, rather than indemnifying for the actual loss incurred. This type of coverage is suitable for the pandemic because it’s effective at covering high frequency, low severity claims without much historical data.
The accelerator will likely be beneficial to both the participating insurtechs and the Lloyd’s market alike because it’ll help the insurtechs expedite product development to drive innovation.
The insurtechs will benefit from the resources and guidance of the accelerator to ramp up production. They’ll have access to expert guidance, alongside financial support to expedite their development of solutions. Given that there was a dearth of capital flowing to early stage insurtechs in Q2, this is all the more timely and will allow these less established insurtechs to bypass the difficult funding conditions.
The Lloyd’s market will benefit from the insurtechs’ innovative capabilities to accelerate digital transformation and better cover novel risks. Incumbent insurers are behind other financial institutions when it comes to using AI applications, which inhibits their ability to adequately cover nascent risks. Thus, insurers are failing to provide adequate coverage for COVID-19, alongside other novel risks, such as climate change — we think accelerators could be crucial for incumbents in addressing these coverage gaps and updating their outdated risk models.
Read More: Business Insider