Protecting the state of Nagaland during monsoon season
Located in north-eastern India and west of Myanmar, Nagaland is one of the country’s smallest states. Featuring a largely mountainous terrain where agriculture constitutes about 70% of its economy, Nagaland has high levels of humidity and heavy rains in the monsoon months of May to September. As a result, the state is susceptible to damage from heavy rainfall, windstorms/hailstorms, floods and landslides, particularly during the monsoon season.
Working as reinsurance partner to Tata AIG General Insurance Company, Swiss Re provided the Nagaland State Disaster Management Authority (NSDMA) with reinsurance protection for the 2020 monsoon season. To do this, we created a new parametric insurance structure that covers the Indian state of Nagaland for excess rainfall that can lead to severe flooding. The coverage is based on a geospatial dataset where rainfall intensity is derived from satellite observations and rain gauges. By design, the state is divided into multiple regions and a stepped payout feature allocates funds to regions in proportion to the amount of recorded rainfall, which mirrors the anticipated levels of loss.
As Swiss Re’s first disaster risk financing arrangement in India, this transaction marks a positive step towards strengthening the country’s resilience to natural disasters. And as cyclones hit India’s coastal areas in early 2020, the Nagaland transaction also serves as a model for other states looking for similar innovative re/insurance solutions that help protect their significant natural catastrophe exposures.
Vietnam RIICE: using satellite technology to protect rice yield
An estimated 10 million farmers in Vietnam, many of them smallholders, rely on agricultural outputs for their livelihoods. At the same time, Vietnam’s extensive coastline makes it particularly susceptible to tropical cyclones and coastal flooding, threatening food security, farmers’ livelihoods and one of the country’s main agricultural exports: rice. With harvests of up to 45 million tonnes of rice per year, Vietnam is the world’s second largest rice exporter. For this reason, the ability to monitor the health of its rice crops is critical to Vietnam’s economy.
In 2020, Swiss Re partnered with the Vietnam National Reinsurer (VINARE) to develop the first index-based rice insurance product adopted within a public scheme by the Association of Southeast Asian Nations. The scheme draws on satellite technologies to measure rice production and damage to fields, and then uses an index-based trigger to enable swift payouts through a simplified claims process.
The technology providing yield data for paddy rice is enabled by RIICE (Remote Sensing-based Information and Insurance for Crops in Emerging Economies), a public-private partnership (PPP) between sarmap, the International Rice Research Institute (IRRI), the Swiss Agency for Development and Cooperation (SDC), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and Swiss Re.
By enabling the deployment of affordable insurance to farmers, the combination of insurance and satellite technologies is proving increasingly useful for public insurance schemes that wish to build resilience in their agricultural sectors.
Magnum Go expands into China
New technologies are changing the way life insurers write business, handle sensitive data and engage customers. This is particularly true in China’s large, broker-driven insurance market, where the sheer number of brokers and volume of insurance transactions require a streamlined, automated process. At the same time, tech-savvy local consumers increasingly expect a better insurance buying experience. Not only do they wish to avoid a cumbersome application process, they also expect customisable products, more convenient transactions and quicker decisions. And in 2020, demand for user-friendly mobile solutions only accelerated as the outbreak of the COVID-19 pandemic prevented insurance agents from meeting with customers in person.
Thanks to Magnum, Swiss Re’s automated, online life insurance underwriting platform, we are well-suited to respond to Chinese regional and national insurers’ needs. In addition to saving time and reducing operating costs, Magnum offers insurers better insight into the business they are writing. To enable the automation of underwriting decisions, years of our own expertise on the latest medical, regulatory and technical developments from Life Guide – Swiss Re’s market-leading underwriting manual – are built directly into the Magnum platform. Customers also benefit from a more flexible, personalised and swift application process that can be carried out anywhere, anytime, including through popular local platforms such as WeChat.
During the past few years, we have continued to roll out Magnum to three of China’s larger life insurance providers. We also deployed a nimbler version last year, which leverages the cloud-based platform using a more flexible hosting option, making the service easily accessible to smaller and mid-sized insurers who lack their own hosting infrastructure. Overall, Magnum enabled the processing of more than 6.3 million insurance applications across the country in 2020. We remain committed to continuously enhancing our digital platform to keep pace with fast-moving technological developments in China, ensuring that we can continue to improve customers’ access to life insurance products.
Life Guide: a leading life and health underwriting manual
Life Guide is a key component of the Magnum underwriting platform. It has also played a critical role during the COVID-19 pandemic. To learn how insights from Life Guide have supported our insurance partners during the COVID-19 crisis, please refer to the Business Report 2020.