Australian insurers must adopt cutting-edge mapping technology to better respond to natural disasters and address rising customer ambivalence towards their brands, according to a leading geo-insurance specialist. The warning comes as Australian insurers face some of their darkest days – with the industry hit with more than 59,010 claims worth $661.3 million as a result of the recent ex-tropical cyclone Oswald alone.
Esri Australia Principal Financial Services Consultant Gary Johnson said, when managing claims, insurers must look to the same Geographic Information System (GIS) technology used by the nation’s emergency services.
“Emergency services used mapping technology with great success during the recent disasters because it gave them an understanding of the geography of the crisis,” Mr Johnson said from a GIS technology conference in Sydney, where the nation’s top insurers met to view the latest industry developments.
“Insurers can gain the same insights by mapping policyholder information over data about the location and extent of the natural disaster.
“This provides a quick and accurate understanding of where their customers are in relation to the crisis and allows them to estimate the potential losses.
“Armed with this information, insurers can prioritise claims, ensuring those in the most distress are assessed as quickly as possible.
“And by adding information to the picture about their own resources – such as claims assessors – they can ensure these resources are assigned to properties in the most efficient way.
“This can shave days off claims assessments and ensure earliest access to service providers, which are inevitably in short supply after large-scale disasters.
“Responding to claims quickly also reduces claims leakage – where loss costs increase as damage worsens through lack of repair.”
Mr Johnson said insurers that used GIS technology to best meet their customers’ expectations would reap the benefits.
“The public’s opinion of insurers has taken a battering in recent years as companies have struggled to meet their customers’ expectations of claims response after natural disasters,” Mr Johnson said.
“GIS technology gives insurers an incredible depth of insight which reveals which policy holders are likely to have been affected by a natural disaster – so they can get on the front foot by contacting them first.
“This is just one example of how insurers can use the technology to protect their brands and entice competitors’ customers with superior customer service.
“In my opinion, insurers that have GIS technology in place before the next natural disaster will have a significant edge over their competitors and will increase their market share as a result.”
Mr Johnson said the technology was also invaluable for estimating losses in large claim events, using multinational insurance giant RSA’s response to natural disasters in the UK as an example.
“Most insurers currently estimate losses based on their market share, or by using a postcode or locality, which is highly inaccurate,” Mr Johnson said.
“For example, some homes have a greater exposure to flood than others in the same street simply because they are built closer to a creek or storm-water drain.
“GIS technology enables insurers to estimate losses at the property level, which provides a much more accurate gauge of policyholders’ potential exposure to natural disasters.
“In the UK, the RSA used GIS technology to reduce the time it takes to estimate losses after large-scale events from several weeks to just a matter of minutes.”