EXCLUSIVE: “Fixing the Future” – Phillip McGriskin and Dan Andrews, Vitesse PSP in ‘The Insurtech Magazine’
In a volatile world, customers want more certainty around insurance. Vitesse PSP’s Phillip McGriskin and Dan Andrews discuss how innovation has both sped up claims settlement and improved consumer confidence
Certainty is increasingly important for consumers in a world facing major challenges, but insurers have struggled to keep up with the technological innovations that would help deliver it and which have revolutionised other financial services. Until now.
Buying insurance generally falls into the category of ‘boring but important,’ be it for a property, a treasured possession or a significant event, both as an individual or as a business. But when something goes wrong, it is invaluable – which is what makes it so vital for many people’s peace of mind.
“There’s not very much that happens in the world without insurance playing a part,” says Vitesse PSP CEO and founder Phillip McGriskin. “Whether it’s goods coming from one side of the world to the other, which need to be insured on their crossing, the production of those goods, or where and how they are stored in a shop, and then how we get them home – all of it is covered by insurance.”
“With covers like parametrics operating on a real-time basis, it becomes all about how you keep the funds flowing”
However, the problem with selling insurance is that you’re asking customers to pay for something that they, hopefully, never have to use and, if they do, it’s usually under extremely negative circumstances. Insurance has also been the laggard when it comes to technology, so the customer experience has historically been quite painful – especially when it comes to payments.
It’s here that Vitesse PSP’s services come into play.
“Vitesse PSP is a payment service provider to the insurance market. We provide global disbursement solutions and our clients leverage a variety of payment methods to settle claims around the globe,” explains the company’s insurance director, Dan Andrews. “We also have a treasury liquidity management solution to help our clients manage liquidity within our platform.”
The UK-regulated payments platform doesn’t work exclusively with insurers but its funding and payment solution, Faster Claims Payment (FCP), has been highly praised by the insurance industry for solving one of its biggest challenges – namely, settlement times.
Indeed, in July it was named Claims Initiative of the Year at the British Insurance Awards. Developed with leading names in the British insurance market and delivered by market operator Lloyd’s of London, FCP enables fast and direct payment of a claim to a policyholder.
It does this by decoupling the payment of claims from the monthly bordereaux and loss fund top-up process, instead facilitating direct access to insurer funds, via Vitesse PSP’s payment platform – thereby decreasing any delay in payment to the customer. The paytech can also release funds in local currencies, improving the claims experience in what are often additionally stressful circumstances.
Because, let’s face it, making an insurance claim is often an emotional issue for policyholders at the best of times, let alone when they’re abroad.
“So it’s critical we get cash to them as quickly as possible, whether that’s to get their business up and running, or to repair damage to a residential or commercial property,” says Andrews.
Parametric insurance has been invaluable in helping to provide real-time settlement and support, because it pays out a pre-specified amount, triggered by the magnitude of certain events, such as a major storm, rather than assessing the losses actually incurred.“Parametric insurance is all about settling as quickly as possible, post-event,” explains Andrews. “So insurers need to make sure that they have a payment provider, be it a bank or a PSP [payment service provider], such as ourselves, that can really deliver seamless, straight-through, real-time payments to the policyholder.”
A DIFFERENT METRIC
One of Vitesse’s parametric partners is London-based commercial flood insurance provider FloodFlash, which pays out once flood water reaches a certain level. Customers can select what that level is and a settlement amount when taking out the policy. The company then installs a unit on the outside of a property. In the event of a flood, it knows the scale and settles the claim accordingly.
“After severe floods in the north of the UK a couple of years ago, we were able to send a payment on behalf of FloodFlash to one policyholder within four hours,” says Andrews. “Flooding is just one type of event, though,” he continues. “We also work with Yokahu, another incredibly innovative business that insures residential properties in the Caribbean. If a hurricane tears your roof off, for example, it uses a set of data to be able to determine the damage and payment.
“We can leverage our network in the Caribbean to settle those payments as quickly as possible. You might have been put up in a sports hall or a hostel and if we can provide, alongside our clients, the comfort of knowing, we’re going to deliver cash to get your property repaired as quickly as possible, that’s an incredibly powerful message. It becomes a real KPI for a lot of insurers.”
“Parametrics, to my mind, is the only truly consumer-focussed insurance producton the market”
Weather events are most commonly associated with parametric insurers but another of Vitesse PSP’s parametric partners is looking after the smaller things in life. Commercial parcel cover provider Anansi insures shipments with major couriers, while removing them from the claims process entirely. So, if a customer pays a premium for a parcel to be delivered, and it fails to arrive, a reimbursement is automatically triggered.
“That process is automated through the shopping platform Shopify’s purchasing experience. It really helps build trust in the marketplace and gives confidence to the customer that they’re going to get their goods,” explains McGriskin. “It also helps the small business selling the product because they know that they’re protected all the way through the chain. So it’s a win-win. And because it’s all automated as much as it can be, it has a low-cost profile.”
“Over the last couple of years, we’ve seen a huge demand for parametric insurance,” adds Andrews, “and some of the big players – in the Lloyd’s market, specifically – are providing far more capacity to parametric MGAs like FloodFlash, Yokahu, Redicova, K2, and many more. It’s incredibly important that trajectory continues, because, to my mind, it’s the only truly consumer-focussed insurance product on the market.
“It’s leading the way when it comes to the optimal customer experience, and I think if the rest of the insurance market doesn’t innovate and evolve, it will get left behind.”
While facilitating easier and quicker payments is a key benefit of insurers partnering with Vitesse PSP, McGriskin is keen to stress that it’s actually the treasury side of payments where the solution is having a profound impact on the insurance industry.
“The primary driver [of the FCP project] has not been the end payment; it’s been the treasury,” he says. “We’ve been working, as a partner, with Lloyd’s of London and the banks “There aren’t many companies that can help with that treasury function as well as the payment function – making sure that the money to pay the claim is there when it’s needed, and also that the claim can be paid as efficiently as possible. So, this is one of the big areas where we’re helping the market focus.”
McGriskin expects to see a lot more partnerships like the Vitesse PSP tie-up with Lloyd’s of London emerge within the insurance industry.
“Our customers are seeing technology, payments and treasury services being used effectively elsewhere, and are trying to understand why it’s taking so long to get something done in the insurance vertical,” he says. “I think businesses and consumers are expecting to see more technology being used more efficiently, to make the transaction and the whole process smoother.”
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