Data: Your best tool for managing catastrophic events
From enhancing communications to fighting fraud, unlock the power of data following extreme weather perils.
There’s no safe place when it comes to catastrophic weather events. Climate and weather disasters caused some $22 billion of damage in 2020, which set a new record, and 2021 ranked second with 20 events. As we approach summer 2022, it’s time to get ready for the possibility of yet another year with a higher-than-average number of catastrophic events. We all hope this doesn’t happen, but hope isn’t a strategy.
Maximizing accurate data is a strategy, and data can be your best tool for handling catastrophic events and related customer communication before, during and after a natural disaster. When a hurricane is bearing down, a wildfire is approaching, and hail, tornadoes or floods arise, policyholders need and expect answers from their insurer that must be based on accurate and timely data.
If you can efficiently and effectively communicate the information customers need, you can save them and your company time and money while reducing stress for everyone. Not to mention you can also increase brand loyalty. Here are some tips to help you use data to manage customer expectations and get through whatever Mother Nature has in store for us this year.
1. Catastrophic event notifications should stand out
This is an easy one, but it’s often overlooked; if the catastrophic event claims notifications you send to customers look like every other claims notification you send, it’s time to fix that. Catastrophic events are a big deal, especially if you’re in the path of one. The notification shouldn’t look like the typical notifications sent out. They should also provide the necessary information and data relevant to each policyholder.
Before a catastrophic event occurs, you can reassure policyholders by providing detailed and personalized information about your planned response to the disaster. What level of support will you provide in the policyholders’ areas/? Will you have onsite trailers to assist customers? What plan of action are state or national officials recommending residents take? You should communicate details like these promptly so customers know you’re ready — and that you’ll be there when they need you.
2. Make sure you’re sharing data across departments
When was the last time you compared notes about data sources with other departments? Or looked at what data is truly available? There’s no time like the present. Underwriters may have data beyond weather satellite imagery and forecasts to help them understand risk levels and exposure. If so, it’s crucial for the claims unit and other departments to have access to this data so it can be properly utilized to help policyholders.
Data on the after-effects of a weather event can be incredibly helpful for claims administration, even information like public utility data on water flow within valves and taps. This type of information can help you pinpoint expected damage right down to the individual policyholder level so you can reach out with personalized, relevant information when customers need you the most.
3. Data is your most important tool after the catastrophic event
Related to the point above, when you have access to data that allows you to zero in on damage at the policyholder level, you can anticipate customer needs and respond appropriately. For example, you can fast-track claims for people in zones that suffered catastrophic damage.
Access to data that narrows down to the home level can also help you fight fraud. Data that tells you exactly where conditions like flooding occurred (and how high the water rose) can trigger fraud alerts when claims exceed expected damage thresholds. The more detailed the information, the more proactive you can be about anticipating customer needs and saving money by detecting fraud. While true predictability of catastrophic events may not be here yet, accurate and timely data can help you deliver on your promise to be there for your policyholders when they need you.
4. Let data and communication partners do the heavy lifting
Insurers are more sophisticated about data than ever, but they’re also incredibly busy, and the amount of information available is growing all the time, which can seem overwhelming. Obtaining data access and setting up processes to capture information and leverage it for customer communication can be complicated.
So, instead of taking on the analysis and communication tasks related to catastrophic event data, consider leaning on partners who can handle integration and automation tasks. With the frequency of catastrophic events on the rise, working with partners who specialize in weather data analysis and customer engagement can help you lower risk exposure and elevate customer loyalty.
Data gathering methods are evolving. Advanced technology like Synthetic Aperture Radar (SAR) enables persistent monitoring. Companies like Finland-based ICEYE now offer catastrophe risk management platforms that give insurers tools to manage risk on a global scale. Data generated by advanced systems like SAR can help organizations manage interconnected climate risks, which is increasingly critical.
We’re moving toward data democratization, and that’s a positive development. Earlier attempts at distributing hyper-local weather data like IBM’s 2016 purchase of The Weather Company were just the beginning. The marketplace is evolving to deliver data and technology that will help companies effectively monitor for risks while assisting people as they seek safety. These are worthy goals, and using your available data to respond accurately and efficiently to catastrophic events now is a step in the right direction.
Tara Kelly is the founder, president and CEO of SPLICE Software, which offers a cloud-based solution that specializes in using big data and artificial intelligence, through the scalability of cloud storage and secure API connections, to create messages that drive customer engagement and the desired call to action.
Opinions expressed here are the author’s own.
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