Shaking up short-term insurance
Insurtechs may end up the big winners from Covid-19, slashing premiums while customers hunker down at home
ý Short-term insurance is one sector in which clients have received immediate relief in the Covid-19 pandemic.
And it may be the nimble newcomers offering flexible terms that stand to gain the most.
The most significant has been Naked Insurance, an insurtech underwritten by Hollard, which offers a 90% discount on motor premiums for clients who are not driving and instead make use of its Coverpause facility.
Says co-founder Alex Thomson: “We started off giving a 40%-50% discount on Coverpause, but often the car was parked at the airport or at an unoccupied property, so there was still a risk of theft.”
But for cars parked at home while their owners hunker down in their houses, it’s a different story.
“The risk of theft is much less for a car standing at a constantly occupied home in lockdown, and people will be present to move their cars in cases of fire or bad weather.”
Naked Insurance will offer this discount until the end of June, and then the business (which was founded by actuaries) will reassess the risk.
This period also coincides with the low season as far as hail damage is concerned. But Thomson says if clients plan to drive, even just to the shops, they should switch cover back on otherwise they won’t be covered for accidents.
Brand Pretorius jnr, CEO of
Momentum Short-term Insurance, believes there will be increased popularity in usage-based motor insurance.
Naked Insurance falls into this category, as did Hollard’s Pay As You Drive, a product well ahead of its time which never took off.
Telematics devices, which measure the quality and quantity of driving as well as the places the driver frequents, allow for a much more sophisticated version of usage-based driving, which is being rolled out by Discovery Insure.
At the other extreme, there has been disappointment in the hospitality industry that its main specialist underwriter — HIC Underwriting Managers — has not been paying out all Covid19 related business interruption claims.
But HIC MD Denleigh Wilensky says it is honouring claims that comply with the relevant conditions, and payments are being made.
“Each business interruption claim received is being considered on its own merits, and we are responding to claims in terms of the specific policies issued.”
Guardrisk nonlife head Richard Eales says nonlife reinsurers, both locally and internationally, have indicated their inability to provide reinsurance infectious/contagious disease cover