Parametrix has the distinction of delivering a true first in the Lloyd’s Lab. The founders, seasoned tech startup professionals, wanted to create new class of parametric insurance – downtime business interruption cover. Following their participation in Lloyd’s Lab cohort 4, they have now launched their product in multiple markets worldwide.
Parametrix’s innovative business interruption policy covers companies when business-critical, cloud-based services go down. Such events often lead to a loss of access to third-party services such as cloud computing and cloud storage, SaaS accounting, payment gateways, stock or client databases, or e-commerce platforms. Parametrix monitors the availability and performance of all the major cloud data centre providers and pay out directly to the client when they detect an outage event, without the need to make a claim. The policy pays out an agreed amount once an outage has been going on for more than an hour, then adds to it in increments of fifteen minutes. The amount paid is based on the client’s own pre-agreed assessment of the amount of money lost per hour during an outage of a particular service.
The Lab: new opportunities
The Parametrix team had a background in tech, a history of entrepreneurship, and a cloud monitoring protocol in place. They had already begun the process of speaking to reinsurers but for them, time to market was a critical factor. The Lloyd’s Lab accelerated the process from modelling and actuarial analysis through to launch, while helping them to understand the Lloyd’s market and connecting them with potential capacity providers.
More than a dozen insurers and reinsurers signed up to work with Parametrix during the Lab programme, and it wasn’t just Parametrix that gained insight. Learning sessions organised through the Lab helped mentors understand policy options to cover business interruption risk due to downtime. Insurers and reinsurers were also able to provide input on how to turn Parametrix’s tool into a viable insurance product.
By the end of the Lab programme, Parametrix had finalised the actuarial analysis to create a viable SME business interruption product and had secured the capacity to back it. The company has now grown to a point where it has a staff of forty, and has launched their product in the USA, Israel, Japan, has recently launched in Germany, and has already paid its first claim in a significant moment of company history.
Enabling access and collaboration to fast-track product delivery
The Lloyd’s Lab brought together the insurance expertise of the market with the technology expertise of the Parametrix team to help deliver an innovative and much-needed product to market quickly. The ability to manage and offset the cost of downtime risk is vital for many small and medium companies reliant upon cloud-based services for sales, customer service and many other critical operational functions.
“I met Parametrix in January 2020 as an early stage startup, because they saw the Lloyd’s report on cloud downtime. They immediately saw the massive potential to provide insurance for this new type of business interruption and brought to the Lab the beginnings of a neat solution to a real problem, with a great impact for customers. Best of all their enthusiasm and work in the Lab brought it to market very fast. This is the Lab’s purpose – to enable innovation that helps businesses manage new types of risk”.
Ed Gaze, Manager of the Lloyd’s Lab
Lloyd’s is the world’s leading insurance and reinsurance marketplace. Through the collective intelligence and risk-sharing expertise of the market’s underwriters, brokers and coverholders, Lloyd’s helps to create a braver world.
The Lloyd’s Lab is the home of Insurtech at Lloyd’s. Over a period of ten weeks, innovative start-up companies with potential insurance solutions are paired with mentors from the market to develop the insurance applications of their products. These new solutions ultimately add value to the market and bring benefits to clients.