By Carl Carter, UK Country CEO of CPP Group Plc
Parametric technology could be a potential panacea for a struggling travel insurance sector, says UK Country CEO of CPP Group Plc Carl Carter
There’s a fine line between the disruptive and the disastrous.
A suitcase lost at the arrival airport? That’s manageable in and of itself. But missing luggage with no funds to replace your personal items and weeks of waiting before your claim is processed …that’s another story.
Traditionally, customers experience a lag between the insured “event” and some form of reimbursement or resolution, which can cause them anything ranging from mild inconvenience to significant grievance.
Parametric technology side-steps this problem altogether. By using pre-determined risk triggers, parametric insurance anticipates customers’ needs, offering them resolution sometimes even before they’re aware of their predicament. These solutions reduce paperwork and touch points for the customer – and who would say no to less paperwork? – making every-day life that bit easier.
In other words, parametric is a script-flipping form of insurance.
CPP is leading the global charge on parametric insurance because its benefits resonate with our leading ethos as an ancillary and parametric products provider: to help customers to deal with the everyday disruptions of life.
That’s also why we launched the world’s first parametric lost luggage product, Smart Luggage – a product that uses parametric technology to offer airline passengers real-time, automated support when their checked luggage is unlocatable, and all without the
the traditional requirement or delay resulting from claims forms.
Benefits all around
Parametric technology doesn’t only change the game for customers though: it presents a host of benefits for insurers and insurance brands too.
From enhanced customer engagement and higher satisfaction rates to reduced claims management costs with opportunities to build in anti-fraud measures, parametric solutions have the power to revolutionise how insurance works for businesses and their customers.
This combined capability to offer an enhanced service to the customer and lower operational costs is powerful and increasingly critical moving into 2022, as it allows insurers to differentiate themselves in a globally commoditised market.
Is parametric really “next-generation”?
I’ve spoken before about how CPP is already engaging with numerous global insurers and partners in discussions for its “next-generation” of consumer parametric services and solutions.
“Next-generation” is somewhat of a buzzword in financial services circles, but in the case of parametric it rings true.
Its applications are extensive and exciting. Parametric solutions could positively shape customer experiences in so many ways, whether it be related to traffic delays, disrupted holidays, global weather impacts, power outages and so on. Real-time resolution in these instances – at times when customers need assistance the most – is what will make parametric insurance so valuable to so many moving forward.
A parametric case study: travel and Covid19
Looking beyond the scenarios above, it’s worth considering how parametric tech relates to Covid-19, because that too is a significant area of opportunity – especially in the travel insurance industry.
Pandemic protocols have become routine in this sector – PCR tests for instance are required for most overseas journeys. Say that a customer’s PCR result doesn’t arrive in time for their family visit abroad – what then? By integrating with data streams around testing, parametric can resolve this issue and avoid disruption turning into disaster.
The additional challenges facing travelling consumers or business people don’t seem to be going away soon, and as international travel continues to gain momentum, proactive and innovative service and insurance solutions like this will be of paramount importance in 2022.
Is the future parametric?
Now more than ever, parametric solutions have the scope to change the insurance game.
For a while, the implementation of parametric technology has been reserved for problems on a macro scale, with a particular emphasis on disaster financing and climate change – for instance, responding to the impact of floods on whole populations or crops. 2021 planted the seeds for its potential to be realised at a more micro level, focused on removing the impact of daily disruption.
As we enter a new year, but with many of the same challenges, parametric offers an attractive solution for consumers and insurers alike. Through innovative technology, real-time resolution and automation of the claims process, parametric solutions minimise stress and financial risk and provide consumers with immediate value and reassurance.
If we are to thrive as an industry and truly support customers beyond Covid19, it’s by harnessing the power of parametric for the future.