Preventive measures are the future of insurance

Any forward-thinking insurer should have climate risk at the forefront of their mind as they enter 2022. Unfortunately, if 2021 was anything to go by, the threat posed by unpredictable and suddenly triggered weather events will only increase: Annual U.S. severe weather insured losses for 2021 have already surpassed $20 billion so far. And as floods, hurricanes and wildfires wreak havoc on infrastructure, systems are becoming overwhelmed, and the U.S. is struggling to cope.

In the past, insurers would market services after severe weather events occurred. Now U.S. carriers are busier than ever predicting and pricing the risk these catastrophes prevent. But these incidents are more volatile and frequent, and insurers must take advantage of every innovation possible to keep pace with the risks.

There are new AI-based technologies out there that could enable insurers not just to keep up but stay ahead of weather risks out there. Utilizing them should be a no brainer.

AI is a revolution in risk avoidance

There are exciting companies in the P&C space developing the aerial imagery analytics capabilities needed to make the preventive coverage dream a reality. Insurers could warn customers of possible risks around their properties before they even occur, using up-to-date and real-time 3D imaging of buildings. In this way, customers could prepare for or mitigate the damage a potential risk could cause — or in some circumstances even prevent it entirely.

The advice given by insurers could be generalized. For example, after sourcing insights from local weather warnings, an insurer could advise a client to leave a faucet running due to impending low temperatures. Other generalized advice could be around crime. Suppose an insurer has access to data showing a recent spate of burglaries in the area, for example. In that case, they could recommend that their customer install or update their burglar alarm system.

But general advice is not the only way in which AI can improve an insurer’s service. Personalized warnings could pertain to the individual property needs a customer presents and include an overhanging tree that needs trimming back or removing to minimize threats during hurricanes or windstorms. AI imaging analytics technology can also analyze external additions to properties like swimming pools, suggesting that customers cover them or add an enclosure to avoid accidents.

It’s time that insurers go the extra mile

Going one step further, AI solutions can enable insurers to make sure that their customers are not only safe ahead of time by giving advice but by offering mitigation services themselves to protect against the risks they analyze.

Insurers could predict risks, warn customers and then carry out the preventive measures needed by their customers by hiring third-party administrators and suppliers. For example, insurers could take control of roofing repairs they have identified in their images by hiring roofers or construction workers. Other suppliers could include alarm or IOT system suppliers or gardeners. Despite the higher investment required by the insurer to avoid damages, this kind of investment pays out in the long term. Insurers would eventually earn back their investment by avoiding pay-outs on losses if the risks materialized.

How to use preventive measures to engage with customers

Insurers can cover all bases with a proactive approach. Not only does it help insurers protect their bottom line, it also builds positive customer relationships. So it simply makes sense that insurers have a new customer engagement tool to help with customer connections by providing preventive analysis leveraged from AI insights. Gone are the days of customers rarely interact with their insurance carriers or view the claim process as an obstacle or burden after an incident.

By taking a proactive angle to risk management, insurers personalize their services and more regularly communicate with customers. Customer experience is the name of the game, so establishing open relationships with customers is a no brainer for improving retention rates and reducing claims. It’s time that insurers open their eyes to the most important part of the industry: improving and constantly innovate their services to improve customer experiences.

An insurance revolution is imminent

In an increasingly unpredictable world, insurers need to employ every weapon in their arsenal when predicting what’s to come. AI imaging analytics are not only ground-breaking; it should be an addition to every forward-thinking property insurer’s service offering. Smart insurers will offer their customers personalized, thought-out risk assessments based on accurate, up-to-date analytics for both parties to benefit from better relationships and reduced claims costs. Technology is revolutionizing the insurance industry: don’t get left behind in the race to innovate.

Izik Lavy (PR@geox-group.com) is co-founder and chief executive officer at GeoX. Any opinions expressed in this piece are the author’s own.

See also:

• Image analytics: A competitive approach for property insurers
• 4 ways to leverage aerial data for property claims handling
• Using aerial data in catastrophe response