How the Insurance Industry Can Use Real-Time Aerial Imagery to Respond to Catastrophic Events
8-September-11 (first appeared in the “Leading Edge Newsletter”) by Bruce A. Seibert, Founder/Product Manager
Current Situation – Natural Disasters in 2011
2011 has been a disastrous year in the United States, weather wise: Wildfires in the Southwest … Drought and wildfires in Texas … Record numbers of tornadoes across the country with the most serious in Missouri and Alabama, but ranging from Colorado to New England … Flooding along the entire Mississippi River and its tributaries from Montana to Mississippi and Louisiana … Flooding from Hurricane Irene with near record high water marks in Maine, New Hampshire, Vermont and New York …
And hurricane season isn’t over until November 30th!
The National Oceanographic & Atmospheric Administration (NOAA) has predicted 14-19 named ocean storms for the Atlantic between August and November in 2011, with 3 to 5 being “Major Hurricanes” with winds of at least 111 miles per hour. There have been 15 named storms so far in 2011.
As of this writing (late September, 2011), Tropical Storm Philippe, the 16th named storm of the year, is churning in the Atlantic with sustained winds of 45 mph on a track similar to that of Hurricane Irene.
An ASSIST-U.S. aircraft and 3-man crew deployed from New England to North Carolina 24 hours in advance of Hurricane Irene’s landfall on 8/26/11. They were ready to perform storm damage assessment there after sitting out the storm on 8/26.
After following the storm up the East Coast, they were on station by 8/29/11 filming Irene’s flood damage in Vermont.
The Impact of Catastrophic Events on Insurance Companies
The costs of these catastrophic events (CATs) to the insurance industry have been monumental. These costs include both the payment of claims to the insured who have suffered legitimate losses and the costs associated with the claims and settlement process.
Such costs can be enormous as a percentage of the total paid out in claims, as happened in the wake of major events such as Hurricanes Andrew (1992) and Katrina (2005), the Joplin and Tuscaloosa tornadoes (2011) and the Northridge (CA) earthquake (1994).
- Insured losses from Hurricane/Tropical Storm Irene are estimated at $5-7 Billion. Total losses, including uninsured damages and economic losses, are projected to be twice as high. (“Adding Up the Cost of Hurricane Irene,” The Wall Street Journal-video, 8/29/2011.)
- Nationwide Insurance reported a drop in its profits of over $1Billion, showing that these costs can dramatically affect an insurer’s bottom line. (“Nationwide Profit Down Due to $1.5 Billion Disaster Losses,” ClaimsJournal.com, 8/15/11.)
- State Farm Insurance has reported that it has paid its customers $5 Billion so far in 2011 for weather-related catastrophic losses. (“State Farm payout for catastrophic losses at $5B,”Bloomberg Businessweek, 9/25/11.)
Using Aerial Surveillance Services for Cost Mitigation
The technology exists to respond to the insurance industry’s need for rapid, post-CAT event surveillance and analysis of disaster areas.
NOTE: These needs are also experienced by many other industries involved in emergency management and response efforts, and the same benefits apply to them.
Aerial imagery services with customized mission parameters have the potential to reduce time spent in the field through immediate information feedback. Aerial imagery services provided in the immediate aftermath of a CAT could significantly cut those costs. It can accelerate the claims process following a CAT event by:
- comprehensively identifying multiple insured properties,
- embedding their addresses into aerial full motion video imagery by GPS coordinates, and
- relaying that imagery to emergency response and recovery teams on the ground in real time
Aerial imagery providers can program the specific addresses of insured properties and their GPS coordinates into their imaging systems.
That data can be loaded as way-points into a “scan plan” like the one here that shows specific locations (addresses) along a river.
The imaging system’s computer processor is coupled to the aircraft’s navigation system, which can then 1) fly to each insured property; 2) lock on to its GPS coordinates, and 3) provide a comprehensive, close-up view of its condition.
Simultaneously, the video imagery is recorded on the aircraft’s computers for later analysis. It can also be transmitted to the Internet for real -time monitoring by corporate executives and field response personnel who can monitor it on a laptop computer, a smart phone or in an emergency operations command center.
In other words, ground-based response teams can move directly to the GPS coordinates provided by the aircraft, while their command center emergency management team is receiving the live video feed from the aircraft and directing operations. This gives field responders the ability to safely and efficiently triage first the most seriously affected areas.
The Bottom Line for Insurers and Underwriters
Aerial surveillance services can aid insurers by providing rapid, comprehensive assessment of widespread damage in the aftermath of a major catastrophic event.
Using air assets that act as a “force multiplier” enables insurance industry emergency response teams to:
- Concentrate relief efforts more efficiently as they service policy holders
- Reduce their time in the field
- Ensure their teams’ safety by using the 3rd dimensional view from the air to guide them around and through the disaster area.
Insurance companies (and others involved in emergency/disaster response) can optimize their emergency response teams’ time and resources on the ground when they use real-time aerial imagery that is transmitted to common viewing devices in the field via the Internet.
The ability to triage efficiently — to identify insured property locations from the air and accurately portray their condition – has two key benefits:
- It reduces an insurance company’s response and recovery costs associated with the claims process.
- It can enhance its corporate image and reputation for service excellence, thus potentially expanding its client base.
(A recent ClaimsJournal.com Reader Poll asked readers which aspect of a company’s capabilities is most responsible for customer satisfaction: Customer service came out on top.)
The result is an improved bottom line for insurers and underwriters.