The fall of 2017 has been privy to some historic storms. In the span of just a few weeks, the gulf coast of Texas was battered by Hurricane Harvey, which flooded Houston and its surrounding areas, and now, Florida, Georgia, and South Carolina are being battered by the high winds and rains of Hurricane Irma.
Worse yet, more storms are forming and threatening to cause chaos and destruction in the region. In fact, while Hurricane Irma was off the coast of Florida, Hurricane Katia hit Tecolutla, Mexico and Hurricane Jose was hovering in the Atlantic.
When these hurricanes hit, the people in their way suffer tremendously. Lives are lost and homes, properties, cars, and other possessions are destroyed. And it falls to the nation’s insurers to make those affected whole again – when and where possible – by financing the recovery and helping to rebuild.
The cost of that endeavor can be high. According to an article in MarketWatch, just the fallout from Hurricane Harvey is, “…likely to cost the insurance industry as much as $10 billion-$15 billion…” And with so many record breaking storms occurring in such a short period of time, insurers are feeling the pinch of having to reimburse those in their path in such rapid succession.
With global climate change making hurricane season more active and storms more intense, the simultaneous appearance of what many consider to be “once in a century” storms should serve as a wake-up call for insurers. Business as usual simply isn’t adequate any more. It’s time for the world’s insurers to take a closer look at how they’re both preparing for and responding to these storms, and identify how they can be utilizing new technologies and data to make them more effective.
Location intelligence and preparedness
The role of insurers doesn’t start when the skies clear, the winds stop and the rains dry up. Insurers are active well before a storm hits, preparing their resources and working hand-in-hand with their policy holders to ensure that they’re doing everything they can to mitigate the potential for damage to their properties.
When a storm is first predicted, insurers often spring into action – ensuring that they have the insurance adjusters and claims professionals prepared and ready to spring into action following the storm. They also begin communicating with policy holders – providing them with tips and best practices for weather-proofing their homes.
Both of these activities can be performed more effectively and efficiently with today’s advanced location intelligence solutions.
If you watched the news coverage in advance of Harvey or Irma, you would have seen meteorologists pointing at maps with multiple projected paths and what they call the “cone of uncertainty” – a cone-shaped geographic area that is projected to be impact by the storm. This level of uncertainty is a result of hurricane paths being almost impossible to predict with 100 percent accuracy.
But, even with this uncertainty baked-in, there is a general understanding of where the hurricane is going to go, and the area that will see some impact. By utilizing today’s advanced location intelligence solutions, insurance companies can look at the number of policies and the cost of property that is in the hurricane’s projected path and plan appropriately. They can also plot and follow the path of the hurricane and get a better understanding of where it is and where it will go next with much more frequency than is available to the general public.
For example, if an insurance company has a large number of insurance adjusters in a part of the state that is expected to see little impact or damage, they can arrange to ever bring in more – or redistribute existing resources – to the areas that are going to be hardest hit. This could be extremely useful in the places that the hurricane will hit in the distant future, even if it gets downgraded to a tropical storm.
In the case of Irma, the storm weakened after making landfall in Florida, but continued to hammer the U.S. with high winds and heavy rain as a tropical storm. Overall, the storm has caused significant destruction across much of three states – Florida, Georgia and South Carolina – decimating property, impacting local businesses and farmers and leavings hundreds of thousands without basic necessities including power. It’s in the states such as Georgia, where hurricanes are less prevalent and where residents are less prepared – where insurers could have had a large impact by helping their policy holders get ready for the storm.
Location intelligence and response
Proper preparation can make all of the difference in an insurance company’s response. By utilizing location intelligence solutions in advance of a hurricane and adjusting resources accordingly, the resulting response by insurance companies will be faster, more organized and more efficient. That means faster services for customers and happier, more loyal customers across the board.
But there are other ways that location intelligence can play a role in response. By overlaying a hurricane’s path with extremely accurate flood plane maps and historical data, insurance companies can identify the regions within cities that we most impacted and focus their efforts there.
They can also analyze the damage from a hurricane on infrastructure – including identifying roads that may be closed or flooded – to help insurance adjusters make smarter and safer decisions about how to get to a property to appraise the damage. In extreme cases, the insurance company could even make the decision to utilize drones or other technologies to determine damage should conditions warrant it.
As global climate change continues to drive more fierce and frequent hurricanes, it’s time for insurance companies to invest in the technologies that will help them improve their response and mitigate damage. Location intelligence can be a strategic and smart investment for companies so that they can more accurately place resources in advance of storms, help policy holder better prepare, and provide a better, more timely response.