Global law firm Clyde & Co has launched a first-of-its-kind connected parametric insurance contract, through its smart contract consultancy, Clyde Code.
Read more: How parametric solutions are transforming the insurance industry
“A connected contract is a digital agreement which links external software systems and data sources to enable the automatic execution of insurance contracts,” said Lee Bacon, partner at Clyde & Co and co-founder of Clyde Code. “By using real-world data and streamlining processes it offers significant cost and efficiency gains for the industry.”
The smart contract, which consists of a data model, a logic code, and a supporting natural language contract, covers the insurance of a solar energy producer against the risk of a shortfall in expected energy generation due to unfavourable weather, and automates the performance of the policy by receiving weather data, calculating potential claims obligations, and producing an exportable report on insurance premiums or losses.
It was built in collaboration with smart legal contract platform Clause based on the specifications developed by the Accord Project, although it can be deployed on other systems and platforms.
Clyde & Co said it will use the model to develop other bespoke connected contacts for different types of insurance and reinsurance agreements.
