Wildfire event response: How P&C insurers can help fix it
Back-to-back years of devastating wildfire losses caught some insurers by surprise, and established players have suffered.
Wildfires, like tornadoes, can leave one property leveled and its neighbor unscathed — jumping houses, neighborhoods and boundaries with seemingly no rhyme or reason.
Consider the devastation of 2018′s Camp Fire, which consumed everything in its path and leveled the town of Paradise. And that’s distinct from what happened in Malibu with the Woolsey Fire, which hopped the Pacific Coast highway.
Now, and admittedly not soon enough, innovations in data and analytics are helping carriers be more proactive with their mitigation and event response operations.
Firsthand account
Having lived in the San Francisco Bay Area, I’ve seen how utterly devastating wildfires can be to communities. California is running out of space, and people are being forced to live and work in wildland-urban interface (WUI) areas that weren’t originally planned for development.
There is a logical reason for why wildfire risk is intensifying, but seeing the devastation is sobering. I recall driving through areas impacted by 2017′s Napa fire and witnessing total losses next to areas that were completely untouched. This gave me perspective about what it must have been like on the ground during the devastation.
Too many of my coworkers have faced similar experiences. They know the fear of evacuation and the desperate hope that their home is still be standing. That’s why wildfire risk is a key focus for us at SpatialKey.
It’s a problem we’re actively working to solve by collaborating with our partners to develop innovative, yet pragmatic, wildfire solutions that can be quickly and easily deployed — all with the end goal of helping insurers go about their jobs of better serving and protecting insureds.
Data and technology are helping insurers be more proactive
Understanding the potential path of a wildfire is crucial, as they can spread incredibly fast. In fact, 2017′s Northern California fires advanced at a rate of more than a football field every three seconds.
Wildfires move rapidly, but perimeter data has historically been generated slowly, especially with a lack of publicly available data over weekends. It’s no wonder insurers are often a step behind with their wildfire event response efforts, and frequently left in the dark during an event, not knowing which insureds have been impacted.
Two years of devastating losses have caught some insurers by surprise and established players have suffered. As such, what has traditionally been viewed as a secondary risk has recently been elevated to a primary risk worthy of focused attention and solutions. Now, technology is helping to shape impactful solutions, like improved perimeter data and automated event alerts and analytics.
Up-to-date event perimeter data
Advancements in NASA’s satellite imagery, for example, coupled with geospatial technology, are providing insurers with up-to-date event perimeter data. Instead of guessing how a fire has grown and which insureds are impacted, carriers can get regular fire boundary updates in the context of their portfolios. But, while data showing burn area and active burn spots is publicly available from sources like NASA and GeoMac, it’s not quick or easy for insurers to effectively operationalize on their own in order to understand the relevant impact. By integrating GeoMac and NASA’s Visible Infrared Imaging Radiometer Suite (VIIRS) data with SpatialKey’s data enrichment and geospatial analytics solution, insurers get faster perimeter updates while understanding the impact to their portfolios. With the ability to contextualize the data, insurance professionals can visualize exposure, apply buffers and filters, and understand TIV and/or policy exposed limits.
With the severity of wildfire events likely to continue and “megafires” emerging as a trend, it’s critical for insurers to be able to keep up with these events. Accurate and up-to-date wildfire perimeter data is one way insurers can implement a more proactive approach.
Automated event alerts and analysis
Up-to-date perimeter data is critical, but it’s still a manual solution that requires insurers to know that an event is happening (or has happened), and then retrieve information to understand the relevant impact. But what if the information could be proactively delivered to you instead? As one of our clients here at SpatialKey commented, “We’re dealing with time-sensitive situations, but the manual nature of exposure data collection, event monitoring, as well as data research and procurement, delays our ability to respond to events expeditiously.”
Automated event alerts and analysis are changing that, and this technology will be a game-changer for wildfire event response by ensuring carriers stay-in-the-know regarding events that have impacted or may impact their portfolios. Analyses are executed automatically based on an insurer’s latest exposure data, as well as predetermined financial and peril-specific thresholds (meaning, anything hitting an insurer’s inbox has been pre-screened and is worthy of immediate attention).
This isn’t pie-in-the-sky innovation but practical innovation that insurers are using right now.
Moving from ‘react and respond’ to ‘prepare and serve’
Using a combination of data and analytics solutions, insurers can more proactively monitor and mitigate wildfire risk — finally taking the guesswork out of what’s historically been a fast-moving and elusive risk. Insurance organizations are facing greater scrutiny as wildfire events become increasingly volatile. As such, how effectively you prepare for and respond to these events can either be an asset or a detriment to your organization. The solutions discussed here can help you take steps toward safeguarding your insureds while moving from “react and respond” to a more proactive “prepare and serve” approach.
Rebecca Morris (rebecca.morris@spatialkey.com) is director of product adoption at Spatialkey, the data enrichment and geospatial analytics company for the P&C insurance industry.
These opinions are the author’s own.
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