Just the other week, IBM announced that it is purchasing the Weather Company, producers of The Weather Channel and Weather.com.


This brought about plenty of chuckles across the internet, with many speculating that IBM is still trying to figure out “cloud.” But what the deal tells us is big data and, yes, cloud technology, is driving a new understanding of the force that affects everyone, every day in the course of business and life itself. This is something of which any insurer interested in the convergence of technology and risk should take note. As Fortune’s Jonathan Vanian observes, The Weather Company counts many insurance companies among its customer base.


The power of analytics – in this case, Watson analytics – may be able to help assess weather risks days before things happen. Watson will become your weather forecaster, and, as Vanian speculates, “if Watson gets ‘smarter; by being fed data, it’s possible its analytical capabilities could improve. Perhaps Watson will be able to produce better five-day forecasts than your local television news meteorologist, who often rely on the National Weather Service.

It’s the ultimate employment of the Internet of Things in the sky. David Kenny, chairman and CEO of The Weather Company, says that we have a massive ‘big data filled atmosphere’ surrounding our planet. Quoted by Adrian Bridgwater in Forbes, he notes that “our data space is massive because it goes from the surface of the Earth all the way around the globe up to the top of the atmosphere and so that’s 100 kilometers high. To track all this data we use satellites at the top layer, information [from weather balloons and] planes throughout the middle layer… and lower down we use our own weather stations as well as data from hundreds of thousands of ‘citizen weather data scientists’ who volunteer to put connected weather stations around the world in their gardens or on golf courses etc.” He predicts that with the analytics run on all this sky-high data, analysts will eventually be able to 100% accurately predict weather three days into the future.


Such analytics provide insurers with more powerful tools to help clients avoid or mitigate risks. Maybe we can’t eliminate or ward off tornados, hurricanes or blizzards yet, but we may have a better understanding of when rough weather is imminent.

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