Pacific Specialty Demonstrates Power of Understory’s Hyperlocalized Weather Data

With unprecedented granularity of weather event information, the carrier is able to make better decisions within its claims organization and reduce claim response expenses.

(Photo credit: James Watkins.)

Pacific Specialty Insurance Company (Palo Alto, Calif.) has engaged with weather network and analytics company Understory (Madison, Wisc.) in a collaboration aimed at reducing weather-related property damage insurance claims by 15 percent—which could amount to $455,000 for a single major storm event, according to the vendor. Understory reports that in May 2017, Denver, Colorado experienced a severe hailstorm with damage projections from the insurance industry estimated at $1.4B. Pacific Specialty Insurance Company worked with Understory and was able to dramatically reduce its claim expenses.

“Understory is changing how we handle weather-related property damage claims,” comments Cory Candelario, VP, Pacific Specialty Insurance Company. “Never before have we been able to correlate specific weather events with potential damage in such a granular way. Because of Understory, we are able to make better decisions within our claims processes, and ultimately, ground-truth claims expenses.”

Sensor Network Provides Hyperlocalized Data

Understory reports that it undertook analysis from a top five, top 50 and regional carrier, amounting to 50,000 policyholders and 10,000 claims, showcased the data’s capabilities to reduce claims expense costs by 15 percent for any storm event—resulting in an average savings of $82 per policyholder per year.

Alex Kubicek, CEO, Understory.

“Insurers benefit from understanding a storm in retrospect,” comments Alex Kubicek, CEO, Understory. “Understory is redefining the industry by offering a revolutionary way to monitor and record weather. Forget radar-based solutions, we measure what happens at the roof-level for companies to better understand specific roof, siding, window and gutter damage.”

Understory’s sensor networks track weather in real-time, collecting critical data that better enables companies such as Pacific Specialty Insurance Company to streamline and execute processes based on actual property-damage information. In contrast to current radar technologies, Understory provides comprehensive and hyperlocalized data to understand damage on the ground.

Understory’s networks are currently deployed in five key metro areas including Dallas-Ft. Worth, Houston, Denver, St. Louis, and Kansas City. Collectively they cover six million homeowners. The company has plans to expand to 75 metro areas by 2020, which will cover 50 percent of all storm-related losses and over 90 percent of all catastrophe-related losses.

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Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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