 "How this start-up is breaking new ground in earthquake insurance")
A fintech start-up from Singapore wants to help insure farmers in India and China against major temblors.
Asia Risk Transfer Solutions (Arts) is currently developing models for these two countries that will provide insights into the risks of each location. This is part of its plans to develop parametric-based, catastrophe insurance products that, it says, are cheaper to administer than conventional ones.
The conventional models on the market compensate victims based on damage assessments by insurers. However, US-based consultants, engaged by Arts, have scaled these figures to calculate the payout for their parametric models.
When an earthquake hits, Arts will overlay its model over previously published earthquake intensity maps to determine how locations around the epicentre have been affected. This model will allocate values to the earthquake intensities in different areas, and payout will be given accordingly.
This makes extensive, on-site damage assessments after a disaster unnecessary, saves expenses, and provides prompt payouts to policyholders. Arts' algorithms will also provide recommendations on premiums payable by consumers in different locations.
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"Currently, parametric insurance is mostly used in catastrophe bonds, which is a different level of risk transfer in the market. What we are doing is bringing it to a level between insurers as well as consumers," says Jovian Ang, vice-president of Arts.
Arts is hoping to complete earthquake modelling for both China and India by the end of 2016 and has begun talks with insurance companies in both countries. As part of its efforts to enter the Chinese market, Arts recruited Dr Feng Hongjuan, chairwoman of Qianhai Re, to its board of directors last month.
This is an excerpt from Tech in Asia. You can read the full article here
This is an excerpt from Tech in Asia. You can read the full article here