In the past 50 years, 1,942 disasters have been attributed to tropical cyclones, which resulted in 7,79,324 fatalities and led to global economic losses of US$ 1407.6 billion – an average of 43 deaths and US$ 78 million in damages every single day.
Hurricanes, typhoons, and tropical cyclones are some of the worst natural disasters churning widespread economic and emotional losses across the world. Although emergency response systems and government aid are crucial in rescuing people from the after-impacts of thesedisasters, the brunt of financial recovery is borne to some extent by insurance companies.
Information from location intelligence helps insurers assess various risks involved with insuring assets in cyclone-prone zones and accordingly charging appropriate premiums from the insured. As a result, insurers around the world have begun to use interactive mapping and modeling to study and predict the impact of tropical cyclones on coastal and inland areas.
Let us take a detailed look at how location intelligence is helping insurance companies conduct an in-depth risk assessment.
Key Benefits of Location Intelligence for Insurance Companies
The primary concern of an insurer is to figure out the potential risk associated with any event that may damage or harm the insured property. Location intelligence plays an important role here, as it helps the insurers obtain every minute detail that may cause physical harm to this insured property.
These are some of the advantages of using location intelligence, for insurance agencies,
- Predictive analysis of tropical cyclone damage
Location intelligence can help the insurer identify if any human life is in harm’s way and give recommendations for securing a building or a policyholder, for both humanitarian and financial reasons.
Based on location intelligence data, insurance companies are supposed to give advice to their customers about preventive measures they can take to prevent losses to human life as well as their property. An example could be building a storm shelter or trimming tall trees in areas where high winds are a risk.
- Estimation of potential financial losses that may incur due to tropical cyclone
Location intelligence empowers the insurer to estimate the potential economic losses in case of property damages and charge appropriate coverage. This prevents the possibility of the insurance company having to bear heavy losses, in the event of cyclone damage.
- Advanced understanding of how to respond to customers
Location intelligence provides the insurers with crucial information regarding the risk and impact of a natural hazard like tropical cyclones. Hence they can proactively realign their workflows to be financially solvent when the claims start coming in.
Insurers would now have information regarding the projected severity of the impact of a tropical cyclone, in a particular cyclone zone. With this, insurers can understand how to better respond to customers in case of insurance claims, even before the cyclone hits.
- Real-time information about the impact of cyclone hazards
Knowing where policyholders are located, the trajectory of the cyclone, and the severity of impact in real-time helps the insurers get an idea of how many and how soon policyholders will be approaching them. This helps insurers to be fully prepared for the assessment and settlement procedures, avoiding unnecessary delays. In addition, with the help of real-time data, they can track the path of the cyclone and figure out if the claim is genuine or exaggerated.
Integrating Location Intelligence into Claims Workflows
So far, we have seen the benefits of location intelligence for insurance companies; now comes the question – how can one integrate this tool into their day-to-day claims system?
The answer is simple. Insurance companies can integrate location intelligence data into their workflows with TROPCYC – a highly efficient, proven software for tropical cyclone risk assessment and impact analysis.
Latitude and longitude of the location is the most important parameter, based on which the software can generate risk impact assessment reports. These reports help insurers estimate the potential losses that may be incurred in case of a cyclone hazard.
According to the Indian Meteorological Department,the Indian coastal areas are divided into four primary zones- Red, Yellow, Blue, and Green, classified according to their cyclone hazard proneness.
- Red – Very Highly Prone
- Blue – Highly Prone
- Green – Moderately Prone
- Yellow – Less Prone
Cyclone hazard proneness is decided based on the frequency of total cyclones, total severe cyclones, actual/estimated maximum wind strength, Probable Maximum Storm Surge (PMSS) associated with the cyclones, and Probable Maximum Precipitation (PMP).
96 districts along the coast of India have been included in this classification.
Red Zone: 12 districts fall in the Red, i.e. very highly prone category. These districts are the most susceptible to severe damage from tropical cyclones, based on historical data.
Blue Zone: 41 districts are included in the Blue, i.e. highly prone category. Most of these districts are located along the coast, but the category includes a few inland districts as well.
Green Zone: The Green, i.e. moderately prone zone includes 30 districts, most of which are evenly located along the coast or inland.
Yellow Zone: This is the least cyclone-prone zone and may be expected to see the least damage due to tropical cyclones, relatively, as compared to the other zones. 13 districts are classified under the Yellow Zone.
With the location intelligence of these places, insurance companies can determine the premium they should charge, as per the susceptibility of the place to cyclone damages.
TROPCYC uses data related to tropical cyclone hazards in India over the past 129 years to predict potential storm impacts for the immediate future.
Furthermore, with TROPCYC, insurance companies can track which policy areas have been affected, in real-time, giving claims managers an idea of the destruction and the potential damage claims they may have to approve. This reduces the turnaround time of the entire process, streamlining the claims management process to a great extent.
What makes TROPCYC extremely easy to use is its intuitive Dashboard, where the user can see all the information at one glance, its detailed report, which maps out all cyclone possibilities over the next 10 years, and the ability to visualize policyholder data on a map facilitating easier understanding.
TROPCYC finds application in a wide variety of sectors that may need insurance from tropical cyclones, such as residential and commercial properties in coastal regions, agricultural and crop insurance, banking, and many others.
Going a step further, it can also be used by reinsurers in cases where the damage is too great for the insurer to bear.
The Way Ahead
Applications like TROPCYC can be the key to resolving insurance claims related to tropical cyclones with ease and speed. It gives insurers an additional opportunity to track storms and reach their own conclusions, eliminating the guesswork involved in settling claims. The combination of authoritative, reliable data with real-time modeling makes this cloud-based software an indispensable solution for insurers.
Consequently, the adoption of GIS for risk assessment is expected to keep increasing in the future, especially as we combat the threat of increased tropical cyclones corresponding to an increase in global warming.
TROPCYC provides a detailed and vivid picture of the impact of tropical cyclones, giving the insurance industry much-needed, up-to-date, and near-accurate information, which helps insurance companies make informed decisions.
Visit our website https://unitygeospatial.com/tropcyc/ for more details. Reach us at +91-9623558539 or write to us at email@example.com to schedule a Demo of the software.