In ‘Parametric insurance: plugging the gaps in business interruption cover,’ Alastair Speare-Cole, president and general manager of the Insurance Division of QOMPLX, spoke with Intelligent Insurer on the role of parametric insurance in closing gaps in SME coverage.
The wordings of traditional insurance coverage for SMEs are often complex and opaque, making it difficult for SMEs to understand what they are actually buying.
“As an SME the products you are offered are very siloed, and also the broking community – the trusted advisor to these SMEs – sometimes struggles with this plethora of different wordings, technical detail and the sheer number of different products on offer,” says Speare-Cole. “There are many good exceptions to that rule, but we felt the whole scene for SMEs had become very suboptimal for the buyers.”
Parametric insurance simplifies the process and offers a quick resolution when a loss occurs so that disruption is limited with a fast cash payout.
“In each of those circumstances we pay people money,” Speare-Cole of QOMPLX says. “They don’t have to go through a claim adjusting process; we are not trying to assess loss, which may involve complicated accounting – we are simply saying that if one of these things happens, it is likely it is going to cost you money, so we are going to give you the policy limit you chose.”