Japanese insurance giant Sompo has launched a new insurance product to insure e-commerce stores on platforms such as Yahoo! Shopping, Shopify, and Amazon, based on the technology of Israeli startup Parametrix. Paramatrix's plan is to provide service to millions of customers in Japan and the Far East over the next few years, thanks to the collaboration. The project was created and agreed upon during the Covid-19 pandemic solely through Zoom meetings.
Parametrix specializes in insurance policies in the event of cloud-based crashes or downtime, ensuring that companies with mission-critical services in the cloud can quickly recover from IT downtime events. The startup, which raised $17.5 million earlier this month from FirstMark Capital, and F2 Ventures, was founded two years ago and has more than 30 employees in offices in Israel and around the world. The company offers its insurance products in Israel, the U.S., and Europe, and now with the collaboration with Sompo is expanding to the Japanese market as well.
"The collaboration with Sompo represents a foothold and our first entry into the Japanese market," said Parametrix co-founder and CEO Yonatan Hatzor. "We are glad of the opportunity to cooperate with Sompo's innovation lab in Israel and to move forward with the digital transformation in the overall insurance services offered by the company."
Parametrix has developed innovative technology which continuously monitors many third-party systems such as cloud computing, internet service providers, customer relations management systems, e-commerce services, and digital payment means. This system provides precise alerts about the timing of downtime and the type of services that have collapsed, as well as providing the data required so that the company can produce inexpensive policies, based on parametric models. Parametric insurance is insurance that allows rapid provision of insurance indemnity, without the need for a claim clearing process, and which is adapted to the needs of the customer, in terms of the level of the coverage.
The significance of Parametrix's offering was on full display last week when millions of users around the world experienced a sudden collapse of news sites like the New York Times, CNN as well as online e-commerce websites such as Amazon, eBay, and Shopify. The crash occurred as a result of a severe malfunction in the servers of a company that provides cloud content infrastructure. The glitch affected not only web surfers, but also a long line of businesses around the world that rely on the proper functioning of those servers that crashed. In addition, during March users worldwide reported a fault using Microsoft which lasted for more than three hours. As a result of the malfunction, multi-user services such as 365, Exchange and Teams collapsed, leading to damage to many businesses. Similar events happened to Google in February and to Amazon late last year.
The collaboration between Parametrix and Sompo has been led by Sompo's innovation center in Tel Aviv, which leads investments and collaborations with Israeli companies in the fields of transport, digital health services, cybersecurity, and insurance services.
"The Covid pandemic created a challenge for us because of our inability to meet face to face with the startups," said Sompo Digital Lab Israel Head, Yinnon Dolev. "Despite the difficulties, we led the project solely through Zoom meetings, with both sides focusing on the aim of providing an insurance solution for the digital world in Japan. We are delighted about the start of the collaboration with Parametrix, which will allow us to adapt our raft of products to the changing digital world."