More companies are seeking risk engineering services to establish a safer, more effective, and adaptable operational framework when selecting insurance cover.
As part of this process, geospatial intelligence (GEOINT) is increasingly being used to differentiate in this space. Insurers can use detailed spatial data and analysis to help assess, mitigate, and manage risks more effectively for their customers.
Michael Gregory, Director of Underwriting Strategy, UK&I, RSA provides further insight.
GEOINT allows analysis and visualisation of geographically referenced information to better inform insurers of the risks their customers face. The process involves the collection, integration, and analysis of geospatial data. This could be from a range of sources, such as:
- satellite imagery,
- aerial photography,
- remote sensing, and
- geographic information systems.
As a result, geospatial intelligence is being leveraged to great effect in the risk engineering space. This allows for the provision of tailored solutions for insurance customers.
Risk assessment and underwriting
GEOINT is used to evaluate the risk of natural disasters such as floods, earthquakes, hurricanes, and wildfires by analysing historical data and predicting future events. This information helps insurers determine the likelihood of claims and set appropriate premiums.
Other uses include the analysis of crime data and trends in specific areas. Insurers can assess the risk of theft, vandalism, and other criminal activities, which can affect property and auto insurance.
Catastrophe modelling
GEOINT is used to create detailed models that simulate the impact of catastrophic events. These models help insurers predict potential losses and prepare for large-scale claims in the event of a disaster.
Claims management
After a disaster, GEOINT can help insurers assess the extent of damage to property, using before and after images. This can help to speed up the claims process and improve accuracy. Spatial data analysis can also identify patterns and anomalies in claims that may indicate fraudulent activity.
Risk mitigation and loss prevention
GEOINT helps insurers advise customers on building in safer locations and using construction methods that minimise risk. This can reduce the likelihood of damage and claims. Similar methodology can be used to develop early warning systems for natural disasters, allowing insurers to alert clients and take preventive measures.
Portfolio management
Progressive insurers use geospatial data to diversify their risk portfolios geographically. By spreading risk across different regions and types of hazards, insurers can help to minimise the impact of localised events on their customer’s overall financial health.
Policy pricing
Precise location data allows for more accurate pricing of policies based on the specific risks associated with a given area. This could lead to fairer premiums for policyholders and better risk management for insurers.
Regulatory compliance
Insurers often need to comply with regulations that require detailed reporting on risk exposure. GEOINT may go some way to providing the necessary data and analysis to meet these requirements.
Customer service and marketing
GEOINT additionally enables insurers to provide more personalised services. It also enables targeted marketing based on the specific needs and risks of different geographic areas.
GEOINT - practical examples
- Flood risk mapping. Insurers use detailed flood maps to assess which properties are in high-risk zones. This information is crucial for underwriting policies and advising clients on flood defences.
- Hurricane impact analysis. Before and after a hurricane, satellite imagery is analysed to determine the areas most affected. This helps insurers prioritise claims handling and allocate resources effectively.
- Urban development impact. GEOINT helps insurers understand how new developments might impact existing risks, such as increased runoff leading to higher flood risk. This allows for proactive risk management and better planning.
The benefits of geospatial intelligence are numerous in the risk management process. We constantly seek to identify innovative use cases for geospatial intelligence. Ultimately, the goal is to enhance our risk consulting proposition.
We have built and are enhancing an advanced metrics database. This will provide the capability to bring thousands of data sets together from external partners, vendors, brokers, and government agencies, whether that be geoeconomic, geopolitical, or risk and sector-based. This is to support strategic and operational decision-making. It helps us identify emerging risks that will affect our customers and us as the insurer.
We have access to external data from over 100 sources, amalgamating to over 1000 dynamic metrics. This data can be tailored and synthesised for specific portfolios, risks, sectors, and regions of the world. Combining this with our heightened focus on emerging and strategic risks and the expertise to understand the implications, we aim to offer strong support to our risk consultancy, underwriting, pricing and customer teams.
RSA has historically been at the forefront of integrating geospatial solutions into our underwriting and pricing processes. Since the early 2000s, we have utilised market leading geospatial data for pricing and underwriting through the production of peril models, and the creation of databases to assess exposure. We are very much alive to the role we can and should be playing in risk prevention.
If you would like to find out more about how we are using geospatial intelligence as part of our Risk Consultancy and wider customer offering, please reach out.
This article forms part of a series covering the latest views and insights from RSA’s Risk Consultancy team. Find out more about our risk consulting offering.
