(Esri map Hurricane Florence path and flooding map, including storm gauges and flooding information from NOAA.)
No sooner had SMA (Boston) partner Mark Breading shared with us his perspective on GIS as one of insurance’s great unsung technologies, the first major event of the 2018 Atlantic Hurricane Season appeared with Hurricane Florence. As a consequence of the event, we heard from GIS solutions vendor Esri (Redlands, Calif.) and thought it a good opportunity to follow up on Breading’s excellent essay. We had the pleasure of interacting with Matt Perry who is Esri’s sales manager for financial services and insurance. We encourage you to read the conversation below along with Breading’s piece, “GIS: The Most Important Technology for Insurance That No One Talks About.”
Insurance Innovation Reporter: Matt, we’ve been discussing the topic of GIS and related technologies at IIR lately. What would you say about the importance of location intelligence to the insurance industry?
Matt Perry, FSI & Insurance Sales Manager, Esri: Understanding the likelihood—or, as they say in the insurance business, the risk—that an event such as a hurricane, flood, or earthquake could occur and damage property or harm people is at the heart of what insurers do. Understanding risk at a given location has two primary benefits. First, insurers can use this information to make certain their customers are as safe as possible (think about trimming brush and trees around houses and other structures in burn areas) and that they carry the appropriate coverages for any catastrophe that might affect that location. Second, insurers can accurately rate the risk to ensure they are collecting appropriate premiums for the losses that are likely to be incurred. Location intelligence helps insurers better understand how to respond to customers by tracking, ahead of time, the severity of an event such as a hurricane. They can view information about the storm conditions, along with policyholder concentrations in the affected areas. This allows carriers to make timely decisions to ensure they have adequate resources available to service their policyholders at a time when they are needed most.
IIR: Maybe you could describe ways insurance carriers incorporate mapping of real-time events such as hurricanes into their claims management process.
MP: Insurance companies can use real-time mapping technology to see, as the event is happening, which policy locations the storm has affected. By viewing this on a map, the path of destruction becomes very clear, very quickly. Once the storm has passed, the insurer’s staff plots claims on a map, as they are reported. This immediately gives claims managers the precise areas of damage to decide what resources they need to help their policyholders and quickly start the claims process.
IIR: The use of social media during disasters such as Hurricane Irene has caught the attention of media outlets like us and other industry observers lately. How are insurers using social media to assist with their catastrophe response?
MP: We are living in a time of unprecedented information availability. Insurers can view social media posts in conjunction with frequently updated storm tracking information from weather services and earthquake activity from the mapping technology. Alongside detailed local street and topographic maps, this provides a new way to assess local conditions in the wake of major tropical storms and earthquakes across the globe. By turning on the geolocation feature of social media platforms like Facebook, Twitter, Flickr, and YouTube, people can annotate their posts with exact locations. While one or two of these posts may not be alert worthy, a large number coming from one location can indicate that there is a severe problem or many people are affected. A scattering of many posts distributed across a vast location can be analyzed by creating a heat map of those posts, which can more easily display clusters of information for quicker analysis. Using this information, insurers might better prepare field crews to respond to situations such as impassible roads, power failures, or other issues that may affect their service to clients.
IIR: Do you expect that the trend of using mapped information to more quickly and accurately process claims will continue?
MP: Yes, I do. This type of technology provides an analysis and oversight solution for insurers, combining authoritative data from storm track modeling and weather services with social media to provide a complete picture of the widespread impacts of natural disasters. The insurance industry can use the most up-to-date information, historical data, and what-if analysis to understand and manage exposure while providing better service to its clients.