Oxbow Partners: What insight does McKenzie Intelligence have on the current UK floods?
Forbes McKenzie: McKenzie Intelligence combines satellite imagery with dozens of other intelligence feeds to provide insurers with detailed and real-time views of claims.
When an event such as the current UK flooding happens, we can quickly provide insurers with information that allows them to coordinate their response leading to both better customer outcomes and better financial performance.
So, for the current floods, insurers can plot their portfolio on our dynamic map and see which properties were affected, at what point and how severely. This is facilitated by our trained analysts who overlay best-in-class satellite and aerial imagery and dozens of other real-time ground-based intelligence feeds onto the map, allowing them to provide assessments of building and infrastructure damage down to 250sqm resolution. We also have before-and-after imagery sliders which can be used to assess sites over time.
The portal is web-based and requires no hosting or integration, meaning that it can be quickly integrated into claims and exposure management workflows.
What sorts of decisions could this insight facilitate for insurers and what impact would that have on their financial performance or customers experience?
In time, insurers could move away from a retrospective claims model to one where they proactively reach out to help policyholders. Long before cordons are lifted and loss adjusters could arrive, claims could already be paid. We believe that this could provide insurers with a significant proposition edge.
Early triage and control of claims also significantly reduces the average settlement amount – we believe by up to 20% – and claims handling expense. For example, our data allows us to provide insurers with intelligence about the validity of an individual claim based on the location of the affected property and our understanding of the flood perimeter. This reduces the number of cases where the insurer needs to send out an adjustor to conduct a physical inspection – a scarce commodity after a large-scale event and a cost that can be slashed.
Who’s using your product at the moment, and what for?
We are currently contracted centrally by Lloyd’s and the Lloyd’s Market Association (LMA) on behalf of the entire market to provide access to the intelligence portal. We also have insurers, brokers, TPAs and loss adjusters around the world as clients. We provide access to our portal and also deliver bespoke consulting services around geospatial analysis for a range of subjects such as new product development, risk control and claims.
Most of our most sophisticated analysis has been for US events to date because that is where most of our clients’ exposure lies at present.
If you unleashed the technology or methodology that you’ve used in the US in the UK, what impact would that have on the insight you provide underwriters over here on events like the current flooding?
We can ingest hundreds of thousands of location points so can offer deep insight even after large-scale natural disasters. After a major US storm or wildfire the level of insight provided by the portal is immense, and this could be replicated in the UK. To illustrate our breadth, in the last week alone we’ve covered an earthquake in China which damaged 10,000 buildings and are tracking storms and floods across the US which have the potential to impact 50 million people.
In Q1 2019 alone, our work has supported litigation and saved clients a total of $40 million on business interruption claims. The kind of insight we provide in these situations is time-stamped intelligence with precise perimeters and provides holistic oversight of entire areas surrounding individual locations to build a detailed understanding of events.
On the operational side, some clients have begun to eliminate ‘boots on the ground’ loss adjusting completely. They have found that technology allows them to reserve more accurately and shave loss ratios as they avoid bidding wars for loss adjusters.
What’s coming up next?
We are currently busy creating the next generation of intelligence which will allow our clients to conduct military-grade intelligence analysis from their own desks using our API. We want FNOL to include imagery and assessment, allowing insurers to automate or at least speed up as much of the process as possible and alert them to losses in real time. This is being achieved through a grant from the European Space Agency and will take advantage of smart city and domestic IoT data.
We’re also creating a global system that enables smart properties to instantly report their status to insurers as an event unfolds.
Chris leads engagements across strategy and transformation, focusing most of his time on global reinsurance and UK & Ireland retail insurance.
Chris started his career at Munich Re where he was a D&O underwriter. During this time, he gained his ACII qualification. He then moved into consulting, where he has spent 20 years advising (re)insurance management teams around the world on topics including strategy development, operating model redesign, governance optimisation, underwriting transformation and innovation. Chris lives in London and spends a lot of his time with clients in Bermuda and Continental Europe.
Chris frequently authors Oxbow Partners papers and articles. He was the lead author on our InsurTech Impact 25 series. He is a dual British and Austrian citizen and speaks fluent German.