811 Driving Decisions and Supporting Claims Operations in P&C Insurance by Utilizing Ground Hail Measurement Networks

Tuesday, 9 January 2018
Exhibit Hall 3 (ACC) (Austin, Texas)
Alex Kubicek, Understory Weather, Somerville, MA; and E. Hewitt, R. S. Bussman, and K. E. Willmot

Ground observations deployed in a dense grid can be used to understand how weather impacts life and property. Radar and satellite give a great understanding of what is happening above the ground, but they can’t always be relied on to show immediate impacts to property during a severe convective storm ranging from high impact events that only happen a handful of times each year to episodic events that happen almost every day.

Understory is a weather hardware and analytics company that manufactures, deploys, and operates weather networks inside metropolitan areas to create unprecedented detail of how weather affects people and businesses at the ground level. Our weather stations are deployed every 2 miles throughout a city and measure hail, wind, rain, and other weather variables to better understand the impact of weather.

Understory’s network of 50 weather stations captured the May 8th Denver storm by directly measuring the momentum, angle of impact, and size distribution of 4,200 individual hailstones. Using our statistical analysis, we predict that 1.6 trillion hailstones fell between 0.5” and 3.0” in diameter. This hailstorm resulted in Colorado’s costliest disaster at $1.4 billion in damage to home and auto.

Based upon Understory’s impact analysis for insurance carriers with market shares in the Top 5, Top 25, Top 250, and others, we found that using ground observations to drive decisions resulted in a 10%+ cost reduction for major storm events and a cost reduction of $100 per policyholder for non-major events. The decisions that are driven by our observations and analysis are the ability to close claims faster, optimize claims adjuster assignment, early fraud detection, and proactive claims submission on behalf of the policyholder.

Driving decision based on our analysis has proven to be a benefit to insurance carriers and their customers. Since the ground observations can be used to estimate potential damage to a home, insurance carriers can take the guess work out of assessing and processing claims. In the past, they waited for the claims to be filed by the policyholders when the policyholder discovered damage to their home. Now, they are starting to reach out proactively to policyholders to help them file a claim and make the whole process as easy and smooth as possible. These results show a protection of property, not only for the consumer, but for the enterprise as well. Observations can drive large value for insurance carriers and ultimately benefit the entire market.

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