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2021 Innovation Awards: Cloud Downtime Insurance



Parametrix Insurance Services
Cloud Downtime Insurance

A thriving market for e-commerce has left thousands of companies relying on cloud computing to keep their business going, while creating an exposure that until recently was left uninsured.

Although cyber liability insurance has become more widely available, many companies are still vulnerable to losses that would occur if the cloud gets dark, according to the developers of Parametrix Insurance LLC's Cloud Downtime Insurance, a parametric product that is triggered if the service is interrupted.

"Companies lose billions of dollars a year," due to the downtime of cloud services, says Neta Rozy, Tel Aviv, Israel-based technology director at Parametrix.

Parametrix cloud coverage is a winner of a 2021

Business Insurance Innovation Award.

"Anyone who uses the cloud in a business-critical way" has exposure time, says Rozy. The interest in the product, which was launched as a "proof of concept" in Israel and is expanding to the United States, is strong from companies that include event-related companies, streaming services, online gaming sites and financial service companies, she said. [19659007] Parametrix developed the product with input from Tokyo Marine Kiln Group Ltd., one of the insurers guaranteeing the coverage, and specialist broker Howden Broking Group Ltd., the distributor of the coverage.

Luke Ogunlaja, London-based innovation guarantor at Tokio Marine Kiln, mentored Parametrix while refining the product in Lloyd & # 39 ;s Lab, helping start-ups create solutions that could add value to Lloyd & # 39 ;s of the London market. .

Coverage is triggered by an agreed period of downtime. Limits of up to $ 1 million are available while the product is in an early stage, Ogunlaja said. "The intention is that we will closely monitor how this parametric insurance solution behaves, but even more important for us to continuously learn from customer feedback before we consider offering our customers greater limits."

When insurance is triggered, the policyholder is asked to certify his loss and the agreed compensation amount is paid. Claims are made at the same time to the risk manager, the broker and the insurer.

Companies may need to rethink the structure of their cloud providers so that downtime in one region can be minimized by relying on services from another part of the world. Sa Rozy. "If we see that the customer has a higher risk of downtime, we share that information with them and some tips and tricks on how they can add some redundancy and reduce their risks."


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