Topa Insurance and ARC Address Protection Gap with Parametric Florida Homeowners Policy

Purchase requires just name and address, and claims are paid within 48 hours via electronic deposit in the case of a loss associated with a storm of given strength and proximity.

(Image credit: Adobe Stock.) 

Florida can be a challenging market for homeowners to secure sufficient insurance to address the risk of hurricanes. Musing on that problem, Alok Jha got the idea that a parametric insurance solution could help homeowners and renters get back on their feet quicker and founded Assured Risk Cover (ARC, Pleasanton, Calif.). The startup connected with Topa Insurance Company, a Calabasas, Calif.-based multiline P&C insurer that was seeking solutions to the insurance protection gap—the difference between insured and economic losses. Together they have created the StormPeace product, launched by Topa in January 2017.

Alok Jha, CEO, Assured Risk Cover.

Alok Jha, CEO, Assured Risk Cover.

StormPeace is a parametric insurance policy that pays based on the occasion of a loss, the strength of a storm and its proximity to the insured address. The products is aimed at providing coverage for several previously uninsurable losses with no deductible. Purchasing the product is designed to be extremely simple, requiring only a name and address. For a modest premium, a homeowner or renter can purchase a StormPeace policy with limits of $1,000 to $15,000. If a hurricane strikes within set parameters, they collect their payment within 24 to 48 hours after the end of the storm without any of the inconvenience or delay typically associated with the claims adjustment process. Policyholders can arrange receive an electronic deposit and can use the money to pay for things like their homeowners’ policy deductible, temporary housing, debris removal and repairs to uninsured property.

“The first 24 to 48 hours after a catastrophe are incredibly stressful for residents and I wanted to alleviate some of that stress,” comments Jha. “The most effective way I knew was to help people cover previously uninsured losses—things excluded from a Homeowners policy, for example.”

Single and Portfolio Loss Risk Profiles

Anthony Manzitto, EVP & COO, Topa Insurance Group.

Anthony Manzitto, EVP & COO, Topa Insurance Group.

After setting up shop in Silicon Valley in 2014, Jha and his team build a predictive model based on NOAA Gulf of Mexico and Atlantic hurricane data collected since 1851. “We developed a robust, risk-based model to price single locations in the State of Florida, and to determine the extreme loss risk for portfolios of locations.

ARC’s efforts coincided with a discussion at Topa Insurance to explore ways to help to fill the insurance protection gap. After being introduced to each other in 2016, the parties began working on StormPeace, with ARC providing the technology, Topa providing the paper, and a reinsurer providing capacity.

“We’re proud to partner with ARC and bring this new insurance coverage to the Florida marketplace and beyond,” says Anthony Manzitto, Executive Vice President & COO of Topa Insurance Group. “The ARC team has done a fantastic job designing the product and the technology to help close the protection gap for consumers and small businesses.”

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Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For over a decade he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at AnthODonnell@IIReporter.com or (503) 936-2803.

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