AEGIS London launches active assailant parametric coverage
A parametric insurance product that protects small businesses against economic losses following a shooting or malicious incident within 250m of their premises has been launched by Lloyd’s insurer AEGIS London . This is the first policy of its type to be launched by the syndicate.
The active assailant parametric product is targeted initially at SME businesses in the Dallas area for portfolios of up to 10 properties. INSDEX Active Response, which is distributed through partner brokers and in time via AEGIS London’s Opal platform, has been developed in conjunction with Skyline Partners , a recent graduate of the Lloyd’s Lab. Skyline’s parametric platform monitors open-source data from the Dallas Police Department to identify when a triggering event has taken place.
Within 48 hours of relevant data being published by the Dallas Police, policyholders will be notified that an insured event has occurred and asked to confirm that, as a consequence, they have suffered a loss. AEGIS London aims to make payment no longer than 14 days after the event but likely much sooner. Limits are flexible up to $50,000 per event, or a maximum of $500,000 per policyholder. Positive basis risk is an important consideration for parametric products and therefore limits are capped at 10% of an insured’s annual business interruption values or rental income. This helps to ensure the innovative product is treated as insurance.
“SMEs are typically the most financially exposed to this type of crime. They are often uninsured and can be faced with substantial legal and medical costs if victims or their families make a claim against them after a violent incident on or near their property. In addition, if their reputation suffers or trading is reduced following an event of this kind, many will face an insurance gap, particularly as some intangible assets are difficult to claim for under traditional insurance policies. Even those with insurance often have high deductibles because events of this nature have become so commonplace. This policy provides clarity of cover, but most importantly pays out quickly after an event significantly reducing the expected adverse financial consequences. This means that insureds are given much needed liquidity at a time of need.” – Calum Williams, terrorism underwriter, AEGIS London.
Depending on how the product performs in Dallas, AEGIS London also hopes to roll it out to other states with California and Florida the next on the list, locations which also suffer a high number of shootings and where there is sufficient history of publicly available police data to enable accurate historical loss analysis and pricing.
