The technology positioned to transform insurance?

Advances in mapping technology are allowing insurance companies to know in real-time how badly natural disasters are hitting their individual policyholders, an insurance technology convention has heard.

Late last month, scores of industry professionals attended the FST Future of Insurance Conference in Sydney, where Esri Australia Principal Consultant Gary Johnson detailed how Geographic Information System (GIS) technology was being used overseas to instantly identify potential claims from catastrophes.

GIS allows data from multiple sources to be overlaid onto finely detailed maps, allowing insurers to measure risk on individual addresses, rather than postcodes or suburbs.

“For example, US company Amica Mutual Insurance uses GIS technology to quickly calculate exposure during natural disasters and rapidly respond to high claim volumes,” Johnson says.

“By mapping and analysing information such as real-time weather feeds, emergency updates and policy holder information, GIS technology can quickly provide insurers with a highly accurate estimate of potential claims, as an event unfolds.

“Previously, it may have taken days, or even weeks, to gauge the impact of a large-scale disaster on an insurer’s portfolio.”
Amica used GIS ahead of and during Superstorm Sandy in 2012, plotting claims in real-time to identify the hardest-hit areas and send its most experienced claims staff to those locations.

Johnson says the technology allows for quicker claim response and thereby quicker recovery.

Increasing sophistication in mapping technology also has the potential to drastically alter how insurers price the risk of property crime.

Cassandra Barker, General Manager of digital mapping specialist MapData Services, told the same convention they now had Australian neighbourhood crime profiles.

“The data can be used to gauge the risk of vehicles being stolen or households getting burgled – and even indicate how safe residents may feel in a particular area,” she says.

“Information regarding daytime population movements can also be accessed, which reveals not only the areas where people spend time during office hours, but also those areas which are desolate during the day – which is of significant value when considering the likelihood of crime.

“Insurers can even use the data to pinpoint where they have too much exposure by comparing the areas rife with criminal activity with the location of their policy holders.”

by James Chalmers | Broker Buzz 02 Apr 2014