How can satellite technology boost the insurance sector? | Insurance business America
It will “improve every phase,” claims the CEO
Satellite technology and Earth observation data are expected to play an important role in building resilience in an increasingly volatile and unpredictable world.
More insurers and governments are using real-time satellite imaging capabilities to not only measure and predict risks during natural disasters, but also to make data-driven decisions about disaster relief and resilient recovery, according to Rafal Modrzewski (pictured below), CEO and co-founder of ICEYE.
“Earth observation data can improve every phase of response by insurers and emergency management organizations,” he told Insurance Business.
Address by world and business leaders in Davos
Last month, Modrzewski delivered a message at the World Economic Forum in Davos about the advances in satellite technology and its contribution to climate resilience.
According to the CEO, advances in satellite imaging will radically transform several industries that require trusted data to support decision-making.
“Opportunities include improved carbon sequestration management, ocean cleanup initiatives and the development of fully autonomous shipping systems,” Modrzewski said.
“Groundbreaking innovations in this area will help address the complexity of these challenges and build global resilience faster and more precisely than ever before.”
According to Modrzewski, there are two key aspects of satellite technology: the granularity of the data available and the speed at which it can be accessed. Synthetic Aperture Radar (SAR) satellite imagery provides detailed images of floods and wildfires as they develop.
SAR satellite technology is a game-changer because its advances allow us to track changes and patterns on the planet and enable decision-makers to predict natural disaster activity in the future.
“These insights are invaluable for governments and insurance companies to respond quickly and accurately with hazard data that consistently closes the gap,” he said.
Public-private partnerships for climate resilience
ICEYE has been instrumental in several public-private partnership projects on flood and wildfire resilience around the world. Modrzewski called on leaders in Davos to accelerate private-public cooperation to address the increasing impacts of climate change and close protection gaps.
Rapidly worsening weather events and other global challenges have brought humanity to the brink of fundamental change, he argued, calling for stronger partnerships between the private and public sectors.
“The collective actions that individuals, organizations and global leaders take together can help reduce global risks and make the transition successful,” said Modrzewski.
In February 2023, ICEYE launched a groundbreaking parametric flood insurance pilot with insurer Swiss Re Corporate Solutions, broker Guy Carpenter, and New York government agencies. The first-of-its-kind parametric program will provide up to $1.1 million in immediate flood assistance to low-income households in the city.
ICEYE contributed its flood insights to a financial resilience program in Accra, Ghana, developed by the Insurance Development Forum (IDF), UNDP and the German government. The program’s partners also included the insurer Allianz and the reinsurer Swiss Re.
The data technology company is also involved in a similar project in Nigeria, where several players – including AXA Climate, Swiss Re and others – are trying to bring insurance and financial resilience to Lagos.
“At ICEYE, we operate over 30 SAR satellites orbiting the Earth, capturing images day and night and, more importantly, in the face of danger, through darkness, smoke and clouds,” Modrzewski said.
“Having the largest SAR satellite constellation is important because it affects the revisit rate at which we can monitor any given location on Earth.”
Better data for parametric insurance solutions
Finally, Modrzewski discussed the importance of timely and accurate data before, during and after major disasters such as floods or forest fires.
More and more insurers are using parametric insurance and other alternative solutions to cover risks that traditional property and casualty insurance cannot cover. However, Modrzewski said the data gap had previously hampered the effectiveness of parametric insurance, which relies on quickly and efficiently insuring vulnerable communities.
“Parametric insurance solutions rely heavily on data, with specific thresholds set as triggers for immediate payouts following a disaster,” he said.
“Accuracy, consistency and speed of data collection are critical to these triggers. Fast and reliable data delivery is critical to unlocking the full potential of parametric insurance.”
What do you think about satellite imaging and similar technologies as tools to strengthen climate resilience?
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2024-02-08 18:36:40
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