Monte Carlo 2014: Excessweather to pay claims based on weather data not loss
Two London market stalwarts have launched a weather index coverholder, backed by capacity from five reinsurance market players.
Lloyd’s coverholder Excessweather is led by former QBE Re senior underwriter John Warwick. Former Aviva Investors chief operating officer John Hodgson is chairman.
Excessweather will sell standalone weather protection policies to compete with the usual insurance company treatment of weather risk as a standard risk.
The traditional approach can lead to claim disputes, Warwick said. However, Excessweather will provide policies that pay out automatically when nearby weather stations to the policyholder record predetermined types of weather, regardless of whether any loss occurs. There is no need for loss adjusting, giving the policyholder certainty about the claim.
The MGA is backed by £100m of capacity per risk. Capacity comes from five players, including ILS Capital.
Speaking to GR at the Monte Carlo Rendez-Vous, Warwick said that the other four backers included “top reinsurers”, but would not give further names for now, explaining “we have to maintain our own IP.”
The coverholder is targeting business from the UK, Europe, Australasia and Southern Africa.
“The key for us is to set up the distribution for the smaller brokers,” Warwick said, but added that Excessweather could also distribute to insurers, reinsurers and other firms.
Warwick added that his new firm wanted £5m of income by the end of 2015. “That could be conservative,” he added.
The weather modelling software used by Excessweather was originally developed by Celsius Pro, Warwick added. Independent Broking Solutions provide services such as back office and banking, as well as introducing clients to Excessweather.
No comments yet