Takeaways:
- Geospatial data from imagery can catch property perils
- Insurers can cover properties in zones previously written off
- Using geospatial data creates parametric insurance opportunities
Geospatial data can help underwriters get and retain clients for longer by alerting them to meaningful changes in risk, said Jascha Prosiegel, head of insurtech programs for Munich Re Specialty, speaking on a panel at InsurTech NY on March 31.
"Geospatial is really, really helpful
"We need to be able to translate that into actuarial KPIs," he said. "Everything else is nice to have, but it's very hard to make a decision that really has an impact on the bottom line."
Using geospatial data about properties in this way helps underwriters find properties that have less risk today than they did 24 months ago, Prosiegel said. "The goal is not to underwrite a property once for 12 months and then drop that client a year later," he said.
Keeping up with changes in property conditions by keeping up with data helps insurers make more informed decisions, according to Kate Stillwell, president of earthquake and parametric operations at Neptune Flood Insurance, who also spoke on the panel.
Changes shown by the data are "going to affect how often we can say 'yes' and how big the exposure really becomes," she said.
Managing geospatial data is challenging, including finding the data that will support risk reductions by policyholders, she added.
"There's the collection of the data, there's the privacy of the data, and there's the standardization of the data so that it fits into underwriting standards, regulation and scoring," Stillwell said.
As an example of using geospatial data to reduce risks, Stillwell pointed to non-governmental organizations for the community of the Eastwick neighborhood in Philadelphia. Eastwick has had higher flood risks for many years. Community members and the NGOs are looking at
Munich Re uses geospatial data to drill deeper beyond ZIP code level data, Prosiegel explained.
"Normally if we have 1,000 all in this ZIP code, that means they're all exposed to certain scenarios," he said. "Geospatial data helps us to say it's only 870 of those, because I can basically zoom into the risk much more on an individual level, and know a lot more about it, which means now I have 130 additional risks that I can write."
The impact of geospatial data on insurance coverage all depends on how it's used, as panelist Margaret Williams, director of product management at EarthDaily Analytics, a Vancouver-based provider of area change detection systems, said.
"My hope is that the geospatial data that we provide, that other companies like us provide, the data that might be saying we should no longer insure this risk, maybe that can be utilized instead for more targeted risk mitigation," she said. "Thinking creatively, how do we apply geospatial data to continue expanding the portfolio so that we can keep saying 'yes' to more and more customers out there?"
