Parsyl Inc., a provider of data-driven, sensor-based systems that are used in parametric risk transfer and insurance, has made a pay-out under a temperature linked policy in less than 8 hours.
The company claims it as an industry record of sorts, but of course there are weather derivative contracts that can pay-out very quickly after a temperature strike is hit.
That aside, Parsyl’s product is particularly interesting as it offers a glimpse of one of the futures for risk and insurance that we write about, the use of sensors as data sources for parametric insurance and how coverage can therefore be integrated within supply-chains, control systems and other critical infrastructure.
I’ve written about this in more detail on my personal blog, in an article discussing the responsiveness of insurance and the role of the sensor.
Parsyl said that in this case a marine cargo insurance claim has been paid in a record-breaking 7 hours and 40 minutes.
It was a spoilage claim that was paid to Niceland Seafood via Parsyl’s ColdCover™ Parametric product, a temperature protection based on data from smart sensors that features pre-configured spoilage triggers to automatically detect and notify customers of a loss.
Niceland Seafood uses Parsyl’s supply chain monitoring and connected cargo insurance products.
In this case, the parametric pay-out was made after Parsyl sensors detected temperature conditions resulting in problematic Shelf Life Lost™ during an air shipment of fresh cod.
Niceland was notified by email and SMS, alerting them to the issue, after which Parsyl paid the claim to Niceland in less than 8 hours from when the goods arrived.
“Parsyl gives us the data we need to stand behind the quality of our fish, and peace of mind knowing we’ll be paid fast if something goes wrong,” explained Patrick Dunaway, Director of Sales and Sustainability at Niceland Seafood. “We were amazed when we recently received claim payment on the same day an issue occurred. As a small business working hard for our customers, getting that cash fast let’s us focus on moving our business forward.”
“Paying a same-day cargo claim shows the immense power of data and the value of insurance – helping customers bounce back from a loss quickly and without hassle,” added Victoria Zak, Director of Insurance at Parsyl. “It is a pleasure to work with Niceland and give them the coverage they need for their shipments and the data they need to prevent issues from happening in the first place.”
It’s another perfect example of how insurance, risk transfer and indeed reinsurance, can all be made much more responsive through the use of data supplying tools and systems, such as sensors.
Given the wealth of data available already within supply-chains, infrastructure, control systems and the like, we’d expect more innovation to emerge on parametric risk transfer and insurance that can pay out very rapidly.
These kinds of innovation can be extremely useful in covering intangible risks, including interruption and non-physical damage related risks, such as delay and spoilage, as Parsyl has discovered.
The broader implication is that as more risk transfer becomes real-time, data driven and based on parameters, so too will more reinsurance capital, leading to innovative opportunities for the ILS market and its capacity to get involved.