How data assets, tech can help restore lives after a catastrophe

An interconnected ecosystem built on trusted data and analytics is vital to understanding and preparing for the impact of natural disasters. So when the worst happens, there can be a more effective restorative response focusing on addressing the most pressing needs.

Last year’s devastating Hurricane Idalia left a trail of destruction across the U.S. that resulted in nearly $2 billion in total private market insured losses and economic hardships for thousands of people.

Hurricane Idalia was just one of the many high-cost natural catastrophes in the U.S. in 2023. In 2023, the total number of confirmed year-to-date weather or climate disaster events in the U.S. with losses exceeding $1 billion was 28. This compares to an annual average of 18 events exceeding $1 billion in losses over the last five years. 

The economic toll of such events is staggering – disasters this year generated insurance claims totaling $92.9 billion in losses stemming from 19 severe storms, two floods, one tropical cyclone event, one wildfire event, and one winter storm event, among others.

As the insurance industry confronts the effects of an increased number of weather events like Hurricane Idalia, insurance carriers across the U.S. play a critical role in rebuilding communities and minimizing the extent and scale of loss in the wake of natural disasters. Traditional processes are no longer adequate for insurance carriers to respond effectively to increased demand and workload. 

Legacy processes can be laborious and time-consuming and hamper insurers’ restoration efforts. They often involve manual or repetitive tasks, which are especially problematic considering that the property insurance and restoration industries are collectively experiencing significant labor shortages and employee churn. 

And, as more insurance providers struggle with labor shortages while also facing a greater influx of storm-related claims, they need to be able to rely on modern solutions across the ecosystem to help them do more with fewer resources. With modern solutions, not only can you make up for a lack of human resources across the insurance supply chain, but carriers can also focus more on helping the people behind the claims.

The newest innovations

Carriers partner with contractors to bring claims to resolution, and both entities need sophisticated technologies to integrate their processes fully for optimal performance. Without access to the latest innovations, carriers and contractors risk utilizing outdated procedures and less effective technology that can lengthen restoration project cycles and leave impacted individuals without support.

There are increasingly popular, newer alternatives to traditional, status-quo technologies that often require a lot of human intervention. The latest technologies provide data-led, AI-enhanced approaches that more efficiently restore affected communities. By aligning with insurtech companies, insurance companies, and restoration contractors pursuing these newer, innovative methods, they are more equipped to deal with the evolving environment riddled with challenges like labor shortages, employee churn, and an increased number of – and more severe – natural disasters. For example, carriers can use comprehensive data assets and smart AI-driven technologies to manage the deployment of resources to help minimize fraud, maximize efficiency, and shorten claims life cycles. 

At the same time, technology embedded with high-quality data enables better forecasting of extreme weather events to identify areas most at risk, which helps property owners better safeguard against the impact of natural disasters. 

The right digital ecosystem helps carriers and contractors fulfill their business goals and promises to policyholders in the face of any scenario. Technology doesn’t just make insurance and restoration professionals more efficient and productive; it also gives them more of an opportunity to offer personalized customer experiences to policyholders when they need it the most.

The critical human touch

Insurers come into peoples’ lives at the most difficult times. Outward-facing insurance professionals must focus on the human first. A human-centered insurance sector taps into the latest AI, machine learning (ML), and data analytics to deliver streamlined services to customers ahead of a disaster and after an event with rapid, targeted restoration. Automation and AI-driven technologies also remove manual, repetitive tasks for professionals so they have more time to focus on the people behind the policy. Reducing the time spent on repetitive tasks associated with sorting through files, updating records, and finding networks of contractors, for example, equates to more time that professionals can spend helping individuals rebuild their lives.

When communities experience devastation, insurers must offer personalized customer experiences and human interaction tailored to individual needs. This is only possible through leveraging sophisticated, modern technological innovations.

Insurance carriers must strategically deploy advanced technologies that work together to create an effective integrated ecosystem. An integrated ecosystem is a digital architecture comprising solutions that connect and share data so that all users and stakeholders can access the same, up-to-date data surrounding every policy and claim. This enables insurers to provide consistent, simple experiences to people during otherwise complex times and to bring focus and compassion to their work as they help communities rebuild and recover in the wake of disasters. Specifically, what benefits do tech-forward insurers yield for homeowners? They provide forward-thinking services.

Innovative companies can offer clear service level agreements with well-defined objectives and timelines to quickly and efficiently give families the timely assurance and support they need during a disaster. 

Disaster preparation and loss prevention

Mobilizing effective recovery processes is essential, but preparing for major weather events and attempting to prevent the scale and size of their impact is equally as important to property owners and the companies that insure them. When an insurance provider understands risk, its personnel can proactively prepare policyholders for disaster and instill trust. Also, carriers can better prepare their catastrophe response procedures by understanding risk and property vulnerability.

There is a wealth of property data that helps inform risk mitigation. For example, actionable insights can be gleaned from data including geospatial, market listing, building permit, property transaction, occupancy, crime, demographics, mortgage transactions, construction cost, natural hazard risk, and catastrophe modeling data.

The challenge for insurers is not in getting access to the data but in collating, harmonizing, and verifying the many underlying data sources. This is the case in getting data to the level of granularity required to insure individual properties.

Using AI and ML, data analytics companies have developed risk models that include the necessary level of granularity and are updated frequently, providing reliable sources of information for insurers. With this information, insurance providers can proactively communicate with policyholders who are in the line of the proverbial fire.

Also, embracing a data-led approach gives insurers granular insights into specific locations’ risks. It helps them to underwrite policies more effectively while having the necessary rapid response systems in place. With AI- and ML-based technology, insurers can better assess risk and associated mitigation actions at the property level, streamline workflows for efficiency and automation, communicate transparently with policyholders, and easily adhere to government regulations.

Putting people first 

As climate risk increases, those working across the insurance ecosystem will be tasked with meeting the changing needs of homeownership. While technology often gets branded as impersonal, the reality is that the right data and tech means that providers have more time and resources to focus on their customers, allowing for a truly human-centered experience.