Modern Insurance Magazine


Data gives the gift of foresight in the face of climate change


Data gives the gift of foresight in the face of climate change

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Antoni, Betty and Cillian will be the first storms to be named in Winter 2022/2023[i]. It says much about our changing climate that for the past 8 years, medium and high alert weather events have been given names to increase public awareness of the risks. Insurance providers are also on high alert, keenly aware of predictions that by 2070, winters will be between 1 and 4.5°C warmer and up to 30% wetter, while summers will be between 1 and 6°C warmer and up to 60% drier[ii].  Those projections already feel very real, having experienced the hottest summer on record in England[iii] followed by an unseasonably warm and wet October.

Understanding our changing climate is critical for insurance pricing, to calculate exposures and accumulations and to get on the front foot in extreme weather events to support customers and manage claims. The growing breadth and depth of geospatial data intelligence now accessible to the insurance sector, drilling down to individual property level, holds the key.

The effects of human-induced climate change will continue to be felt as warmer oceans mean increased rainfall and more winter storms.  Met Office projections suggest there will also be disproportionately more severe storms across the UK [iv].   Indeed, the Association of British Insurers (ABI) predicts that future windstorm-related insured losses are expected to increase by 18% within the next 100 years[v].

Meanwhile, intense rainfall events are projected to increase significantly[vi] with large volumes of rain falling in just one day, which can lead to flash flooding, particularly in urban areas such as London where water is unable to seep into soil and drains cannot cope with the volume of water.

As well as promoting building back better with flood resilient materials and joining the siren call for UK. planning reform to reflect the growing flood risk, insurance providers are increasingly relying on geospatial data intelligence and browser-based data visualisation tools such as LexisNexis® Map View.  This enables them to predict and track weather events in near real-time.

Data from the Environment Agency and other flood data providers can be viewed and overlaid with policyholder data, gifting insurance providers the power of foresight. Data visualisation allows insurance professionals to understand the elevation of the property, its proximity to water and even predict where water would go in a particular flood event.  This means they can make a swift assessment of the homes and businesses in the affected areas and whether basements or trees pose additional risks, so that policyholders can be forewarned and claims support put in place.

As well as providing ‘real-time’ insight, this same data can be used to accurately assess and price risk at the individual property level.

It takes a good number of data points to fully understand property risk at the point of quote, and data about the property brings a further layer of granularity with construction type, purchase value, the number of bedrooms, bathrooms, roof-type, claims history – the list goes on. The wide choice of data is under constant review to ensure that as our climate continues to change, insurance providers can access the depth and breadth of data they need to make the most accurate risk assessment and therefore price fairly and more accurately.

With 61% of adults in the UK. having building insurance[vii] and around 5 million[viii] properties in flood risk areas in England and Wales, the financial and emotional burden to home insurance providers and their customers threatens to be overwhelming.  That’s why as an industry it’s so important to use the data and resources we have today and that will keep evolving to help protect people, property and possessions from the increasing climate risks we all face.












Content provided by Caroline Elliott-Grey, product manager and Heikki Vesanto​, manager, GIS data science, at LexisNexis Risk Solutions, Insurance, UK and Ireland