What on earth have space satellites got to do with your personal home insurance?
Tue 13 Jul 2021
There are some interesting technology trends emerging, one of which is the positioning of satellites in space that are able to monitor minute changes in activity. Companies, such as ICEYE, a Finnish technology company, have built and deployed satellites in the sky that are capable of seeing near real-time millimetre movements in water even when the view is obscured by cloud or it is dark.
But what is the relevance to your home insurance and how could this impact you in the future? This satellite technology can see the height water reaches in different places and provide timely water depth estimations. This means, if you were subject to flooding, there is an image and evidence of the actual height the water reached and the damage it would cause at that level. So that means that insurers and underwriters could use this emerging technology to improve the customer claims process and speed up claims resolution times. No lengthy verification of water levels and lots of onsite photos taken after the event when the water has subsided. Instead, the satellite will know what level the water reached and where, and so claims can be processed much quicker and with less administration from the customer.
Underwriters and re-insurers would also be able to assess more quickly and accurately the potential level of claims that is likely to arise from an event such as a large scale flood. Why is this important? Insurance companies allocate money to cover loss events, and need to undertake loss assessments for each event. Allocating too little money means they need to find the cash from elsewhere to fund customer claims, whilst allocating too much money means the money is sitting there not doing anything for them. If they could more accurately make a loss assessment and assess the loss levels then the money held to cover estimation errors could be invested and the return on that used to reduce the premiums of your personal home insurance premiums. So something that seems unconnected has a real impact on your personal insurance.
Also, this technology can be used to minimise or potentially avoid severe damage from floods. The satellite technology combines third party data, such as weather forecasts, with its own artificial intelligence (AI) algorithms, to be able to assess if flooding is likely in an area and build an early warning system. Then it can monitor the situation and customers in identified affected areas can be advised to move their possessions upstairs, or move their vehicles etc, thus minimising damage to personal items and helping to reduce the hassle to the customer.
With their ability to monitor changes and movements, these satellites can also be deployed in other areas such as earthquake movements or raging wildfires. As a potential example use here, large highrise buildings could be monitored regularly and minute movements that could indicate earthquake activity can be checked and the integrity of the building structure maintained. Again this technology could also be used pre-emptively to evacuate people before noticeable movement takes place from an earthquake.
Over the next few years this technology is expected to gain momentum and start becoming more mainstream as insurers and underwriters start to adopt the technology and apply it in practical ways.
Fortunately the satellites are so small and so far away we won’t be able to see them hanging around helping improve our insurance experience!
Type of article: Articles
Category: Protecting my belongings
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