By Heikki Vesanto, manager GIS Data Science, Insurance, LexisNexis Risk Solutions UK & Ireland
In direct response, the data insurance providers need to better predict and manage risk is growing - from basement indicators to ‘live’ flood alerts, geospatial data intelligence for insurance is expanding at a pace.
As 1 in 6 homes in the UK are already at risk of flood , research shows that even under a best-case scenario, where global warming is limited to 1.8 degrees C, the places in the UK where risks will increase most rapidly are Southeast England, South Wales, Northwest England and Central Scotland. Densely populated cities in these areas like London, Cardiff, Manchester, Glasgow, and Edinburgh may see damage increases of over 25% . It’s cities just like these which are already at risk of flash flooding, not helped by overwhelmed drainage systems which can easily get blocked, causing surface flooding, a particular threat to properties with basements.
Digging deeper into flood risk
Indeed, the distinct vulnerability of basements to flooding is a topical one as homeowners and developers in log-jammed cities seek to extend and build where land is lacking. In London, where the Mayor’s official assessment of housing need in London found that the city now requires around 66,000 new homes a year , over 7000 new basements were excavated between 2008 and 2019. It is not only the homeowners in the basement who are at risk of flooding either, as soil excavation for basements decreases the permeability of soil in the locality as a whole, contributing to flash flooding and a greater risk of subsidence.
Despite their obvious liability to flooding, the popularity of basements persists, so knowing which home or business is at risk at individual property level is vital, not only to help insurance providers select risk appropriately, but also to help support those insured.
Insurance providers can now access this knowledge with the help of a Basement Indicator which combines multiple data sources to create a unique attribute that helps identify whether a basement or an underground level is present in a home or a commercial building.
A greener environment can pose a threat too
With an eye on reducing global warming and the amenity value to the local area, the desire to cut down trees on existing and new developments has lessened. Yet, with trees implicated in 70% of reports of subsidence and heave on clay soil and windstorms posing an additional threat to property, getting to know the tree population surrounding properties could be incredibly helpful for insurance providers. This is why a detailed map of hundreds of millions of trees across England and Wales is now available to insurance providers, helping them to understand the location and height of trees in the proximity of the properties they are insuring.
Insurance provider can also now access a Windstorm model to help understand maximum wind gust speeds as a better predictor for property and structural damage compared to sustained wind speeds.
Forewarned is forearmed
Communities across the UK have been severely affected by flood in the last few years. Not least the Calder Valley, which experienced devastation in the wake of 2020’s storm Ciara and the council now runs a ‘Be Flood Aware’ campaign for the local residents. This encourages residents and business owners to prepare themselves and their properties for floods .
With flood a real and present danger within the property insurance market, it is also the responsibility of insurance providers to help protect the properties on their books. They can do this by using Flood Alerts, provided by the Environment Agency through the monitoring of river height gauges around England. As levels rise, near real-time alert data for a particular section of a river that may be at risk of flood is provided and the status updated as often as every 15 minutes. By using this data, insurance providers can warn their customers of impending risks, winning them valuable time to help protect themselves, their personal effects and their property.
It also of course means that they can take immediate action in pricing and new cover decisions to limit their exposure to the risk.
Gaining a holistic view of property risk for pricing and underwriting has become paramount. The use of targeted geospatial data at point of quote through data enrichment or in map form through geospatial data visualisation tools such as LexisNexis® Map View, will help to identify customers and properties at present or future risk - from flood to subsidence to windstorm activity. Most importantly it can help residents, business owners and insurance providers to better manage and mitigate the outcome of weather-related events as they unfold.
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