Technology Revolutionizes Real-Time Modeling and Response

In recent years, weather-related natural disasters have been driving up claim costs for businesses, communities and governments. Total insured losses from Hurricane Ian alone are estimated to run deep into tens of billions of dollars. In response, there is a greater need for real-time monitoring of catastrophes, instant response and rapid assessment of damage.

Speed is critical: For communities, it’s about an effective escape route while governments need to ensure the continuation of essential services. For insurance companies, it’s about knowing where they need to send experts to survey the damage and deliver claims payments as soon as possible to help customers repair or rebuild property.

Modeling a Storm Before and During Landfall

To help insurers and organizations be better informed as soon as possible, Aon’s Impact Forecasting Team developed Automated Event Response (AER), which covers everything from windstorms in Europe to North Atlantic hurricanes and typhoons in Japan. The forecasts of windstorms or tropical cyclones from different meteorological institutions are utilized with Impact Forecasting’s catastrophe models and insurer’s portfolio data to produce automatic prediction of loss every time a new forecast data is issued. Customized AER reports are sent to each insurer automatically within 30 to 60 minutes of a forecast to help quantify the geographic scope, severity and projected cost of the event — even before the storm makes landfall.

(Re)insurers face a range of challenges when determining a major storm’s potential damage and financial impact. They include identifying the geographic region to be affected, the number of risks impacted and the potential loss. If (re)insurers can receive this information before landfall, they can make decisions about managing claims adjustor resources, setting loss expectations and evaluating potential impacts to reinsurance structures.

AER allows businesses to protect and prepare their physical locations and staff. Consider a retailer with thousands of locations across a region that can receive updated forecasts multiple times per day as a hurricane makes landfall. This allows the business to assess which of its locations are likely to be hardest hit and how severely, as well as take steps to ensure the safety of the employees and the site location’s security. That knowledge allows companies to prepare early and know what to expect, often resulting in quicker claims processing.

Using Technology and Data to Improve Disaster Recovery

After any event, it’s important to use sophisticated and instant response methods to assess damage. (Re)insurers, businesses and private individuals are increasingly using technology such as satellite imagery and drones to immediately assess damage, particularly in hard-to-reach areas. For example, within one to two days after an event, Aon’s Property Claims Team fly drones in impacted areas, then immediately send the footage to clients to assess their damage. Real-time footage helps expedite the payment of claims and increases the accuracy of claims assessment.

After Hurricane Ian in Florida, Aon used satellites to send clients images of initial damage on Captiva Island, located near Fort Myers off Florida's Gulf Coast. Damage was extensive, and local authorities prohibited people and even drones from entering the island during rescue operations. While the satellite images weren’t as clear as those generated by drone technology, they helped assess large-scale damage, such as roofs being partially or completely blown off.

Technology has allowed for better insight as catastrophes unfold; it has also resulted in faster and more thorough insurance assessments of damages after an event. As claims costs rise due to factors like climate change, inflation and supply chain issues, companies are seeking savings opportunities as they build resilience.

Learn more in Aon’s 2023 Weather, Climate and Catastrophe Insights report, which provides data and analysis of over 400 catastrophes with regional breakouts and insights.