Earlier this month we sat down with FloodFlash Head of Compliance Emma Radcliffe. Our discussion covered her approach and the challenges of bringing a whole new style of insurance to the UK commercial market. Here’s how we got on…
FF: Hi Emma! To kick us off, can you summarise the role of compliance at FloodFlash and why it’s so important?
ER: Insurance is subject to regulation, meaning that if we want to sell FloodFlash insurance, we need to abide by certain rules. The majority of these rules are there to protect clients from unfair practices and businesses collapsing. At FloodFlash, we are deeply committed to our customers and want to provide them with excellent service from the purchase of the policy through to claim and renewal.
Our new take on parametric insurance fills a gap that traditional insurance just can’t. It also offers lots of benefits, particularly our fast claims. The FloodFlash compliance department works to ensure that we can continue to bring FloodFlash to the market on behalf of the customer and best fulfil their needs.
FF: What attracted you to your role at FloodFlash?
ER: I’ve worked in or around the insurance industry for the whole of my career, but was becoming frustrated with the limitations of working for a larger entity. The offer from FloodFlash ticked all the boxes for me: it provided flexibility, so I can balance work with family and other commitments; the product is ambitious and disruptive, which I found exciting; and as a start-up, there are always options for widening the scope of your role, which is not always possible in a more established company environment.
FF: How have you found building a new product from the ground up?
ER: Challenging! The pace of change is fast, so it’s been important for me to be flexible and agile in terms of advice I am giving and views I am making.
FF: What are the main compliance challenges in setting up a parametric insurance product?
ER: Ensuring the client fully understands the product. Parametric insurance is a simple enough concept, but it is a departure from traditional insurance. That means that clients (brokers and policyholders) need extra help when first getting to grips with the product.
FF: If you could take anything from traditional insurance what would it be?
The traditional indemnity market has paved the way for companies like us. They have centuries of learning what works and what doesn’t when it comes to drafting policies, risk modelling and pricing that we have drawn on in creating FloodFlash.
FF: What do you think traditional cover could learn from the parametric model?
ER: Swifter claim resolution. It’s a huge selling point for parametric policies in general and FloodFlash in particular that claim payments are fast. We are really proud that we consistently paid claims in full within days of the triggering flood event. Now we’re working hard to shorten that timeline further. It’s a no-brainer for the insurance industry. Fulfilling claims is what we’re here for and on a wider scale, it will increase trust in the industry as a whole if carriers adopt that speed of client service.
FF: If you could change anything about the industry what would it be?
ER: I think that the insurance industry has a lot of work to do to increase customer confidence. In my opinion transparency is a large part of this. There is a lot of work that the industry could do to educate customers why things are done in the way that they are.
The flip-side of that is that the industry should not assume that just because we have always done things a certain way they are necessarily right! Self-reflection is pretty key here too. The industry should be open to reviewing established practices to examine whether they are necessarily still appropriate.
FF: Do you think the purpose of the Compliance function will change as more new products like FloodFlash come through?
ER: I think there is always going to be a need for a regulatory compliance function, regardless of product. Having said that, the increasing dominance of insurtech and the rise of parametric insurance for SMEs will almost certainly attract more regulatory attention as time goes on. How the regulator will respond remains to be seen.
FF: Sounds like you’ll definitely be kept busy whatever happens. What advice would you give to someone who’s starting out with a new parametric product?
Consider regulation an intrinsic part of your thought process: don’t treat it as an obstacle. Keep the customer’s needs central in your considerations and you won’t go far wrong.
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