How this startup is breaking new ground in earthquake insurance

An earthquake-ruined building. Photo credit: Masahiko Ohkubo

A fintech startup from Singapore wants to help protect farmers in India and China against natural catastrophe and livelihood risks.

Asia Risk Transfer Solutions (ART) is currently developing technology for these two countries that will provide disaster insurance products for everyday people.

This is part of its plans to work with catastrophe risk modeling companies to develop catastrophe insurance products that, it says, are practical to administer than conventional ones.

How does it work?

The conventional models on the market compensate victims based on damage assessments by insurers. This causes long delays in settlement time and raises administrative costs, especially in disasters of massive geographical footprints. ARTS’ approach assesses damages based on parameters.

When an earthquake hits, ARTS will overlay digital earthquake intensity maps over affected insurance policyholders to determine how locations around the epicenter have been affected. This model will allocate values to the earthquake intensities in different areas, and payout will be given accordingly.

There are not really any existing models for what we are trying to do.

This makes extensive, on-site damage assessments after a disaster unnecessary, saves expenses, and provides prompt payouts to policyholders. ARTS’ algorithms will also provide recommendations on premiums payable by consumers in different locations.

Jovian Ang, vice president of ARTS, claims there aren’t any sustainable and scalable disaster insurance products for the low and middle class.

“Currently, parametric insurance is mostly used in catastrophe bonds, which is a different level of risk transfer in the market. What we are doing is bringing it to a level between insurers as well as consumers.”

More on the startup

Founded at the beginning of 2016, ARTS believes technology will allow companies to sell it to a market that had been unable to afford it.

As part of its efforts to enter the insurance industry, ARTS recruited Dr. Feng Hongjuan, chairwoman of Qianhai Re, to its board of directors last month.

L-R: Founder and CEO of ARTS, Alex Chen, VP business management, Jovian Ang, marketing and creative design manager, Matthew James, product design and development manager, Toh Rui Jie, enterprise solutions manager, Soham Ghosh, and front end development manager, Ian Chen.

Answering a pressing need