Qorus Innovation in Insurance Awards 2024

Baloise Parasurance – risk free traveling with our parametric vacation insurance

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03/04/2024 Insurance Innovation

About

Bad weather, flight delays, lost luggage – vacations can come with unpleasant events. However, with Baloise “Parasurance” we got you covered. Once a predefined trigger is hit, we automatically compensate our customers without any further ado.

Innovation presentation

Going on vacation is something most of us look forward to already way in advance. We plan our trip and imagine how nice it is going to be. However, sometimes reality is not in our favor and certain inconveniences may happen while we are travelling. For example, the flight to our chosen destination may be delayed or upon arrival the luggage is delayed, and we need an immediate solution. In addition, once leaving the airport behind and arriving at the vacation destination, the weather may be unfavorable, and rain prevents us from fully enjoying our holidays.

With Parasurance, we thought about all these inconveniences and provide insurance coverage for these unfortunate events. With our flight delay, we compensate customers based on the number of hours they had to wait for their departure. The luggage late coverage complements this offer and indemnifies customers if their luggage has not arrived at the destination on time. In contrast, our bad weather coverage indemnifies customers if a predefined amount of precipitation in millimeters is exceeded for a given destination. Even though the coverage cannot make the bad weather disappear, our customers are at least indemnified for their forgone joy and are compensated for their expenses for indoor activities such as a spa visit or alike. Furthermore, all coverages are fully automated: Once a threshold is hit and a customer is eligible for a compensation, the customer will be notified about the claim and the payment will be initiated instantaneously. Thus, by adding these three parametric coverages to our vacation insurance offering, our customers surely enjoy a hassle-free vacation.

Uniqueness of the project

By adding the three parametric coverages to our vacation insurance portfolio, we are now offering a solution for our clients that is unique in many aspects.

First and foremost, we are the first insurance company in Switzerland offering parametric coverages to private individuals. With the three coverages “flight delay,” “luggage late” and “bad weather” our clients can now cover protection needs that have not been addressed before by insurance companies. While many solutions exist to compensate passengers for delayed flights, our solution indemnifies customers instantaneously while they are facing the pain of a delay. That means, if a delay is longer than 2 hours, our customers receive either a lounge voucher or CHF 25 transferred to their account to ease the inconvenience of waiting. In addition, if the delay is longer than 4 hours, our customers get transferred CHF 200 for the loss of their time and the unpleasant experience. Similarly, if the luggage is delayed, customers get an immediate payout of CHF 100 per insured piece. If the luggage is not retrieved and delivered to the destination in 48 hours, another CHF 200 are transferred to the customer’s account.

Furthermore, while the risk of flight and luggage delay has at least to some degree been addressed by non-parametric coverages in the past, our bad weather coverage is a completely new solution to the insurance market. With this product the risk of rain during a vacation can be insured. If a certain predefined level of precipitation is exceeded at the holiday destination during the trip, the customer can verify in his personal dashboard whether he is eligible for a compensation payment. At the end of the holiday, the customer receives CHF 100 for each insured day on which the predefined level of rain, snow or hail was exceeded. Thus, our coverage compensates our customers for their alternative indoor program during a rainy day.

This comprehensive new offer is the result of a very fruitful partnership of Baloise with three startups, namely Wetterheld, Blink Parametrics and Kasko. Wetterheld is our partner for the bad weather insurance, while with Blink Parametrics we constructed the flight and luggage delay insurance. Thanks to Kasko, our tech partner, we can offer these parametric coverages as well as our traditional vacation products in an integrated fashion to our clients.

Second, Parasurance presents a paradigm shift in the claims settlement process because it is not linked to the reporting of a claim by the policyholder. That means, that the insured person does not need to actively report a claim. Instead, Baloise automatically contacts the customer as soon as the parameters set out in the terms and conditions of the specific insurance policy are exceeded. The customer can then confirm the claim in his personalized dashboard, which triggers the payment of the compensation. Accordingly, with Parasurance, we redefine the claims process by proactively informing our customers that we owe them a compensation. This fully automated claims process is one of the key advantages of our parametric coverages.

Third, Baloise’s newly launched parametric insurance policies can be integrated into, for example, the purchase processes of online travel agencies and hotels as part of an embedded insurance approach. Thus, due to the modularity of the parametric products, they can be seamlessly integrated in a partner’s customer journey. The insurance is available right where it is needed, i.e., at the time of the purchase decision of a trip, thereby increasing the attractiveness of a partner’s offer.

Fourth, our product is highly scalable across a wide range of use cases. Provided that measurable parameters are available, this type of insurance has multiple areas of application, both in a private as well as a business client context. We are eager to explore new avenues of parametric coverages in the future.

Finally, Baloise is also using the modular holiday insurance to evaluate the use of artificial intelligence along the customer journey of an insurance purchase. We are currently developing a custom GPT that can provide information on the terms and conditions of an insurance policy and generate an instant quote based on the data submitted. This, in turn, even allows an insurance policy to be taken out without any more forms having to be filled in. The use of AI promises to simplify decision-making processes and facilitate the efficient online purchase of insurance. It is also destined to become the go-to method for customers wanting to find information quickly and easily.

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