3 Innovations Drive Insurance Wildfire Analytics
Wildfire in the USA – the new normal – thousands of fires, tens of thousands of structures damaged and destroyed, billions of dollars of loss.
A property insurance company faced with a changing wildfire risk landscape must focus on being responsive, accurate and predictable. Responsiveness speaks to customer intimacy. Accuracy implies solid decision making. Predictability conveys minimizing the surprises that can rock an insurance business.
Three innovations come together to provide the responsiveness, accuracy and predictability that insurance companies require as they respond to a growing wildfire risk in the Western states and beyond. These 3 innovations are changing the way that insurance companies anticipate the risks, manage through the events, and resolve claims quickly.
The 3 Innovations
Three innovations now allow analysts to get all of the context that they need to understand the locations of customers’ properties, the wildfire risk associated with those properties, and the current and historical view into the locations of wildfires. These innovations are:
- Wildfire mapping – Agencies such as Cal Fire and others now provide real-time views into the extent of wildfires, their trajectories, and their management.
- Wildfire risk modeling – HazardHub is a leader in creating and delivering high accuracy, affordable wildfire risk models that account for both risk and mitigation factors.
- Building footprint data – BuildingFootprintUSA provides highly detailed, comprehensive views of buildings and addresses
How do these three innovative forces change the game for property insurance companies before, during and after fires? Let’s find out.
Before the Wildfire
Where is the property located?
What is the wildfire risk associated with the property?
What is the price based on the level of risk?
Am I exceeding my accumulations in one area?
Locate any property using BuildingFootprintUSA comprehensive building footprint data. Whether your customer is residential or commercial, an owner or a tenant, high accuracy building footprint data provides the location, the number of buildings, and other property and usage information that can impact an underwriting or customer management decisions.
With a highly accurate location in hand, analyze each location using HazardHub’s risk modeling data. HazardHub’s data provides the individual risk factors of a location (drought, vegetation, wind), summary wildfire risk scores, and risk protection scores (driven by the proximity of hydrants and fire stations).
During the Wildfire
What policies are impacted by a wildfire now?
What other policies are potentially at risk?
How can we help our policyholders during this crisis?
What are my projected losses?
Near real-time mapping of wildfires, available through 24/7 mapping services, allow insight into the extent and trajectory of fires. For example, in late September, anyone could access the Cal Fire Wildfire Perimeters web mapping service to see the extent of fires. At the time, the El Dorado fire was expanding rapidly into urban areas.
Utilizing addressed building footprint data you could view the status at an incredible level of detail. If you had a residential property insurance customer at 2250 Pine Flat Rd you would notice that they are or soon could be impacted by wildfire.
This awareness lets you deliver a high degree of customer care. You could make your customer aware that their property could be in danger; often this is non-obvious when someone is away from their home. You can immediately suggest a path to begin a claims process, where expediting a claims process can benefit both you and the homeowner. Lastly, you can view your customers in aggregate; what is the totality of the impact that your organization faces, now and in the coming days.
After the Wildfire
How many customers were impacted by the wildfire?
How did our models perform versus actual claims experience?
Did we price our policies appropriately?
Are there other similar areas that bear the same level of wildfire risk and underwriting exposure? What can we do differently next time?
With increasing wildfire, and increasing development in high wildfire risk areas, both damage and claims will happen. In a development such as the one picture below, with a strong Fire Protection Score, the most tenacious wildfires will cause millions of dollars of damage.
The tools are now available for after-action reviews of policy writing decisions. A team of analysts can view an area impacted by wildfire (using high accuracy wildfire boundaries), reviewing policy holders (geocoded to building footprint accuracy), compiling risk and mitigation data (from HazardHub) to answer the question “how well did we do?” Did the anticipated risk align with the damage that happened?
Wildfire mapping, property risk data and building footprint accuracy are coming together to provide innovative tools for the next generation of wildfire solutions. These solutions will support decision making and customer care before, during and after wildfire. These solutions will place your company as being responsive, accurate, predictable in high risk, high stakes decisions that you are making.
Interested in finding out more? Contact us today.