Insurers use data to help customers weather storms, floods

Insurers are using rapidly evolving data tools to help predict, and potentially prevent, hurricane-related damages, an effort they hope will make during this year’s hurricane season. Will get benefit.

The past six years had higher-than-average Atlantic hurricane activity, an unfortunate streak for communities along the way. This year’s season—usually defined as June to November—is predicted to be another busy one.

Although scientists are divided on how climate change may affect hurricane numbers, warming is expected to intensify storm surges and rain, leading to more flooding.

Insurers and data providers in that region have invested in data analysts and climate scientists to build and refine advanced models that can help map potential damage well before any bad weather strikes.

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A road may flood while an adjacent building remains dry, said Dr. Kelly Herrid, a climate scientist who heads the Disaster Research and Development Unit in Boston, so small errors in older databases have a misleading effect on a given site’s flood vulnerability. can put Based Liberty Mutual Insurance Company

The One Liberty tool uses a combination of aerial imagery and machine learning to define the footprints of buildings and deliver a more accurate impact of exposure, which can then be shared with customers to strengthen their security .

“What was available 10 years ago versus what is available now has really changed dramatically,” Dr. Harid said. “There’s a huge ecosystem of better flood analysis tools out there.”

Understanding risk and taking proactive measures can make a big difference to companies. In the wake of Hurricane Harvey of 2017, Dr. Harid noted, staff at Houston’s MD Anderson Cancer Center were able to Walk and kayak through flooded streets To facilitate a work. Cancer Hospital, after the earlier floods, had installed a floodgate that allowed it to continue working While the surrounding area was flooded with water.

Warmer skies and oceans are widely believed to be making things worse as a result of climate change. Munich-based insurer

Allianz SE

noted that storm rainfall is a major factor in Ida’s devastating and, in some cases, fatal effects 11% considered more intense than before the industrial age.

In last year’s season, Hurricane Ida entered Louisiana through the Caribbean before dumping massive amounts of rain in scattered places, estimated $36 billion in insured losses, Allianz said in a recent report.

Improved modeling has helped the insurance industry remain solvent despite paying for heavy weather-related losses in recent years, said Marc Anquilare, president of

Verisk Analytics Inc.,

A risk analysis company that provides advanced modeling to major insurance companies.

The Verisk databases that store information on commercial property, for example, can differentiate between 14 types of restaurants, from a pub to a white tablecloth establishment. Such granular data can provide insight into the risks facing an insurance company in a certain area, Mr. Anquilare said.

“All that data and all that analysis that is constantly improving, it has made the industry better,” Mr. Anquilare said.

Cole Meyer, a senior structuralist

Swiss Ray,

The Zurich-based insurance and reinsurance provider, said more advanced modeling has helped with some of the company’s more complex products. These include parametrics, an increasingly popular type of disaster insurance that operates as a kind of bet on future weather.

A parametric policy will pay off quickly, for example, when the wind speed at a precise location exceeds the agreed speed, so the business is not required to do the time-consuming proof of its loss.

“That data gets better and better and more granular from year to year,” Mr. Meyer said.

Insurers said their client companies have made changes so they can move quickly if their areas are affected by storms or floods. One Allianz client, for example, provides temporary on-site housing for essential workers whose homes may be damaged by flooding, said Thomas Varney, Allianz’s head of North American risk consulting.

Another big customer has installed generators at various locations to provide backup in case there is a power outage from the storm, Mr. Verne said.

In this hot, wet world, insurers are seeking to cooperate more with customers when outweighing their climate risks, a practice that has the added bonus of reducing how much insurers can ultimately pay, says Liberty’s Dr. Harid said. Customers are thinking more about the big picture and how climate change may affect their bottom line, she said.

“As a society we have a lot of work to do to accept that the climate of the past is not going to become the climate of the future,” said Dr. Harid said. “We have to adapt today.”

write to Richard Vanderford [email protected]

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