View from on high offers opportunity for insurance

aerial mapping

When a fire or flood results in an expensive claim to repair or replaced damaged fencing on a large property, how do you figure out whether the fencing was in place before the fire?

Rapidly falling costs for aerial photography and digitisation mean the insurance industry now has a host of new tools at its disposal, such nearmap’s recently released insurance mapping product. For instance, users can simply zoom in to previous high-resolution aerial images of the property and use the built-in measuring tool to figure out how many metres of fence existed prior to the event, if indeed any fence existed at all. Many other tools, such as a flood simulation feature that shows affected areas depending on the inputted level of flooding, are useful
in other ways.

“We capture images of populated areas over and over again. For a major city such as Sydney, Melbourne or Brisbane we capture aerial photography eight to ten times a year,” says Paul Peterson, Head of Product at nearmap. “The imagery is immediately available and the product contains measuring tools as well as hundreds of overlays for data such as crime rates, house values, demographics, elevation et cetera.”

Vantage point

The rapid advancement in mapping technology is constantly providing “wow” moments for those in insurance and other industries. For those in the solar panel installation industry, for instance, the nearmap Solar product allows users to place virtual solar panels on the roof of a house and, as they move them around the roof or tilt them at different angles, see in real-time how much money they would save in electricity every year.

And even those in the mapping industry are not immune to moments of amazement when they discover just what the new technologies and data sets can do. For Cassandra Barker, General Manager of MapData Services, such a moment came when she realised how powerful her brand’s offerings were in terms of risk management for insurance businesses.

“It is a powerful tool to use for underwriting and claims handling,” Barker says. “When you have perils data for bushfire, cyclone, flood, hail and earthquakes combined with additional crime data matched to specific addresses then it makes the analysis of risk far easier and clearer than ever before. But the insurance firms using such data really well are also using it to visualise risk and to manage portfolio risk.”

“So if a cyclone or a hail storm is on its way, mapping data can be utilised to put an embargo on certain geographical areas that the bad weather is predicted to cover, so that people don’t suddenly get cover notes for potential damage. And with portfolio risk, companies can use the technology to analyse the levels of risk within their policy groups to ensure that risk stays at an acceptable level.”

New insights

Josh Venman, a Principal Consultant at Esri Australia, says smart insurers are using their mapping data products in many interesting and valuable ways, including the constant analysis of the geographical distribution of their agents.

“These are the people that sell and maintain a company’s policies, but are they located to take advantage of demand for specific types of insurance?” Venman asks. “And are the types of agents located correctly around the country? Is there a good spread of urban and rural agents, and considering the extra travel often involved with being a rural broker, are there enough in areas of potentially high demand?”

Most industries are seeking to better understand, to a more granular level, their customers. Where are they based, who are they and what do they like? For the insurance industry such information is of immense value, and mapping technology is making it all very real.

“We deal with virtually every industry group,” Venman says. “There is no real constraint on what you can do with mapping technology any longer, even if you want to know specific facts about the ocean floor.”

“For those in the insurance sphere, mapping technology is valuable on three levels. The first is that it offers an understanding of risk on a granular level. It refines our understanding of how specific environments will behave during certain events.

“The second is the fact that it helps insurers to help people when the time comes for claims. It means insurers can respond quickly and validate claims more easily. Finally, it makes the servicing of new customers, and marketing, more targeted and efficient.”

Happier customers

Advanced mapping technology’s ability to make is quicker and easier to validate claims is one aspect that has many watching it with interest. During disasters and weather events, the insurance industry often comes under fire for not responding quickly enough.

Using mapping technology, insurers can look ahead of an event to the customers likely to be affected and communicate with them in real time, from emailing policy holders and telling them to park their vehicles under cover as a hail storm approaches to knowing exactly which clients’ properties will be affected by floodwaters and getting in touch to help them through the claims process.

Mapping data can be used as a driver for good in the responsible development of future buildings and communities, says Karl Sullivan, General Manager Risk with the Insurance Council of Australia.

“Sending an appropriate price signal about the risks is critical to encouraging smart choices,” he says. “If we artificially lowered the price of flood risk for everybody in an area that is susceptible to flooding, you could find that there would be no disadvantage to building a home next to the river as the price signal about the high risk disappears.

“In other jurisdictions where that occurs, more and more properties are built in areas that are at high risk. So the risk just gets bigger and bigger. But if you pool in a more high-resolution fashion that maintains the price signal and you start to influence better decisions.”