Satellite tech, data, AI give insurers a dynamic view

If we want to know how events will unfold in the future, we should look to the past. Insurers have long relied on this idea, gathering and assembling data to predict, as precisely as possible, the likelihood of some event occurring. But now, that model is under strain. Historical data remains essential, but on its own it is no longer sufficient in a faster-changing world. Recent events have cast light on how the tried-and-tested model – looking to the past to predict the future – might be improved.

How? The world is in the grip of polycrisis – a neologism coined in the 1990s that refers to a situation in which a number of distinct crises take place simultaneously and interact in ways that amplify each other, producing outcomes graver than the sum of the individual crises. Economically, ecologically, technologically, and geopolitically, we are going through a period of upheaval that shows no signs of ending any time soon. 

Consider the effects of the climate crisis. Floods and wildfires have become more common and the losses  incurred are sky-high. Insurers using past data to estimate future risk are under pressure: the model works best when the world is broadly stable, and today it is less so. Historical data still matters, but it needs to be complemented by more current sources of insight. The result is that in some places, the expected losses are so high that insurers cannot price policies at a level people will pay and still turn a profit. Consequently, they either raise premiums sharply or cease to offer coverage altogether. This has created a divide between total losses and what insurers can cover.

To help close this protection gap, insurers are evolving their model. The industry is placing greater emphasis on prevention alongside its long-standing role in responding to damage. Insurers have long supported clients in managing risk, but new technologies allow this work to be done with greater speed, precision, and scale. In practice, that means helping clients spot threats early, limiting their exposure, and reducing the chance or scale of damage. That, in turn, depends on having better data. 

This is why insurers are looking to the skies. Satellites orbiting our planet now collect vast amounts of data on a daily basis. Planet, for example, operates constellations that image the Earth daily, painting, in close to real time, a vivid picture of physical risk. Combined with other data and AI solutions, it gives insurers a more dynamic view of the world. This was not possible even a decade ago.

Insurers can now observe events as they develop and in some cases anticipate them. That allows their clients to take action earlier, and earlier action reduces harm and losses. The mechanism is basic: prevention is better – and cheaper – than cure. 

But in the event of a catastrophe, it also helps insurers respond. Satellites can, in some cases, reduce the need to send experts on-site, particularly for less complex claims, helping to speed up what has traditionally been a slower and more resource-intensive process. Satellite images can provide a rapid, wide-angle view of what has been affected, which can then be complemented by on-the-ground expertise where needed. Flooded streets, destroyed buildings, burned land – seeing the scale of the damage can significantly speed up the claims process and reduce uncertainty around the extent of loss.

After a shock, the faster insurers can process claims, the faster they can pay them. That means that businesses can reopen sooner, homeowners can repair houses and replace lost goods, and, in short, the sooner people can get back on their feet and go back to their lives. Satellite and other forms of data therefore support not only insurers and those affected by disaster, but whole communities.

The key point is this: intelligent and appropriate action depends on information. The better the information we have at our disposal, the better we can act. Satellite data is a powerful form of information we have at our disposal, and it's radically reshaping the way that the insurance industry thinks about risk – to the benefit of those who depend on us.