In a recent Leadership in Insurance Podcast, Tim McCosh, Founder and CEO of Yokahu, discussed the power of parametric insurance and how Yokahu is hoping to shape its future in the industry
Climate change is a dominating factor in all aspects of our lives, and as Tim McCosh, founder and CEO of Yokahu, recently discussed with Alex Bond, Director, FinPro in a Leadership in Insurance Podcast, businesses, organisations and governments around the world are looking for solutions to climate risk.
Insurance is one option many eventually turn to, especially for rebuilding peoples’ lives and livelihoods following a devastating weather-related event – however, insurance is only truly beneficial if the availability, products and policies are right. This is where parametric cover is proving its worth.
“Having seen first-hand the impacts of slow claims payments following a hurricane, I set out to establish Yokahu, an MGA which offers affordable parametric hurricane cover,” Tim explained. “The concept is simple; we monitor wind speeds at a policyholder’s address, and when these reach a certain point we pay based on the central pressure of the storm. The parametric aspect of the policy means there is certainty on how much will be paid out, and when.”
Protecting people
But this isn’t the only way that parametric cover is proving beneficial. Yokahu was selected for inclusion in the ninth cohort of leading global insurtech accelerator, Lloyd’s Lab in order to develop a groundbreaking parametric Loan Default Protection product and as Tim explained, parametric insurance can help take costs away from people too.
“This has been our focus during our time in the Lloyd’s Lab,” Tim revealed. “We are creating mechanisms to reduce financial stress; aimed at financial institutions, this product will allow loan and mortgage borrowers repayment breaks following a climate disaster. We have to remember that the world is a pyramid of people, businesses, financial institutions and governments; the people are at the bottom, so if you don’t support them properly, the whole pyramid suffers,” Tim added.
With a series of products already designed for people living in the Caribbean, Yokahu is now expanding its work to help vulnerable communities in new geographies.
“We have begun proposals for insurance options for informal settlements in Africa, and we have started discussions about free micro policies in the Caribbean too,” Tim said. “The world is our oyster, it is just about enabling other participants in the market to co-develop solutions with us.”
To listen to this excellent podcast, please click here: