Please Note: This article has been amended since the original publication date following clarification from SpatialKey.
One big challenge facing insurers is how to accurately assess flood risk. Given that flood damage is usually substantial and costly; it’s vital for insurers to be able to develop premiums that reflect the genuine level of risk involved with any particular property. It’s not fair to expect the person, whose home sits on top of a hill (where the only chance of them ever claiming for flood damage is if their insurer has to build an ark to process claims) to pay for the rest of the world is it?
SpatialKey the US developer has teamed up with Willis Re (who are the reinsurance arm of the Willis Group Holdings Plc) and KatRisk LLC to tackle the problem more elegantly than at any time in the past. They say that their intention is to offer insurers a blend of the latest scientific developments and analytical methodologies in order to better evaluate and manager their risk exposure to flooding.
There are three key components to the SpatialKey offering:
Underwriting (This Aspect is not Connected with the Willis Partnership)
For the underwriting section of the software the idea will be to use accurate flood data and marry it to other data in order to significantly increase accuracy when assessing flood risk. It will also allow insurers to determine the impact on their overall risk portfolio of operating in any given area.
The application serves map data with flood data overlaid so that the process is visually appealing and simple to understand and make manual adjustments to based on your risk profile.
SpatialKey says that their “fast, intuitive visual analytics” will allow insurers to understand patterns and exposure trends. This is to allow the insurer to optimize risk exposure and link that exposure to the potential outcomes. They key here is ROI and the intent is to allow insurers to maximize their profitability whilst retaining a high-degree of resiliency.
The final component is real time analysis of flood events. When the hurricane or typhoon strikes an insurer should be able to track the outcomes of the event. This will allow for rapid and accurate response to the clients who are affected by it as well as allowing for continuous revision of your risk profile.
The event analysis pulls in data from both historical events and from scientific predictions of new scenarios so that you can take a fully balanced view of an event as it unfolds. There is no ETA for the event analysis module. The precise data that will be available for such an analysis is also to be confirmed at a later date.
Overall (Section Updated)
How long will it take for SpatialKey to become available in the UK? That’s a good question. The partnership with KatRisk (as well as JBA Risk Management and Ambiental Technical Solutions) brings Spatial Key access to all the American flooding data and also to global flooding data – so you’ll need to watch SpatialKey’s release schedule for further details.