By Richard Toomey, Senior Manager, Commercial Insurance at LexisNexis Risk Solutions UK and Ireland
As the ABI has stated, the UK’s Insurance and Long-term Saving sector is the fourth largest in the world and the largest in Europe and will play a crucial role in tackling Climate Change .
‘Helping Society Adapt’ is one of the four main pillars in the ABI’s Climate Change roadmap in supporting the delivery of the UK’s Net Zero Strategy and part of this is focused on more sustainable decisions post claim and the development of markets for repair and replace .
Prior to a claim, however, insurance providers are already working hard to reduce the risks created by climate change, through access to a huge amount of geospatial data intelligence, including live data on flood warnings and river flows, with the tools to predict, visualise and help mitigate losses.
Aside from the cost of claims, flooding creates misery and causes significant disruption to people’s lives and livelihoods.
Understanding the changing risks created by extreme weather, not just to price more effectively but help mitigate the physical risks posed by climate change has become imperative.
In commercial property and to an extent home insurance, insurance providers can quite create a picture or map of risk through the evolution of desktop based geospatial data visualisation tools, helping to make immediate sense of the huge and growing volume of data at the market’s disposal.
This data includes the characteristics of a property (floors, height, roof type etc.); its location; the individuals behind the business; the crime, arson and environmental risks including subsidence and near real-time data direct from the Environment Agency, as well as highly predictive flood risk data from JBA and other respected flood modelling organisations. These insights are hugely valuable for pricing accurately, giving insurance providers an immediate picture of the flood risk at the point of quote.
Of particular value is historical flood data which when mapped shows the maximum extent of all individually recorded flood outlines from rivers, the sea and groundwater springs, thus revealing areas of land that have previously been subject to flooding in England.
This takes into account the presence of defenses, structures, and other infrastructure where they existed at the time of flooding and includes floods where overtopping, such as at seawalls, river breaches or blockages may have occurred.
Beyond this, when flood and other environmental data is viewed in tandem with customer and policy data held within an insurance providers’ own databases, data visualisation can help insurance providers pinpoint down to individual properties, the policyholders most at risk as a flood or storm threatens and as events actually occur.
Insurance providers can look at a specific geographical region, a postcode, an address or a single property outline, so that rather than wait for an influx of claims to assess the exposure to a climate event, they can quickly understand which policyholders could be impacted and where on the ground resources need to be located to support customers in the path of the storm or flood. Live flood data updated every 15 minutes allows the insurance provider to track the path of the storm, offering valuable time to alert customers to move possessions, vehicles and themselves out of harm’s way. This intelligence also helps with planning on the ground resources, working with the local authorities and claims adjusters.
Understanding which insured properties are vacant versus occupied in a flood, fire or a severe storm, knowing roads closed due to fallen trees, gauging where flood water will flow if a barrier fails or a river bursts its banks is now possible through the evolution of geospatial data visualisation tools for property insurance providers, such as LexisNexis® Map View.
There is also a clear value in using geospatial intelligence and data visualisation tools developed for the insurance market to support greater awareness of flood risk amongst local councils, planning departments, businesses and residents so that they can play their part in mitigating those risks.
The flexibility of the tools offered today makes it easy to assess risk as needed or as constant monitor for a whole commercial property portfolio. Looking at a whole portfolio alongside past claims may also help insurance providers price more accurately and understand how they could help mitigate future claims and potential losses caused by weather events.
Climate change is changing the claims landscape but data, analytics and technology can help insurance providers prepare and price based on the most current view of risk. A picture can say a thousand words so being able to instantly visualise the risk to policyholders – day or night - using highly granular data on past and present flood events puts insurance providers on the front foot to support customers and help stem the ever-present threat of an incoming tide of flood claims.
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