Dynamic exposure monitoring: What are the opportunities?

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Insurwave Team
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  • Insurers have traditionally used common tracking tools to monitor asset locations and manage exposures.
  • The need for dynamic solutions has increased due to evolving risks like natural disasters, civil unrest, and geopolitical conflicts.
  • Advanced technology now allows for real-time monitoring and dynamic exposure tracking.
  • Platforms like Insurwave enable insurers to link asset locations with insurance terms and liabilities.
  • Dynamic monitoring helps insurers react quickly to events and advise clients more effectively.
  • Historical examples, such as the Dubai Airport rainstorms and Costa Concordia disaster, illustrate the benefits of proactive monitoring.
  • Insurers can identify patterns and behaviours using data platforms, informing better underwriting and pricing strategies.
  • Granular data points from real-time monitoring can inspire new insurance products and services.
  • The ability to track and analyse assets dynamically enhances risk management and client support.
  • Real-time exposure monitoring addresses the limitations of traditional underwriting methods.

Traditionally, insurers have assessed their exposures using common tracking tools to track their assets' location and take appropriate action. However, in an evolving world with new and dynamic situations developing quickly, from CAT events like hurricanes and floods to civil unrest and geopolitical conflict, there is a clear need for more dynamic solutions that enable real-time monitoring. 

Thankfully, this technology is available and can present a number of exciting and beneficial opportunities for those willing to engage. In this article, we’ve outlined a few of the best examples to showcase the promise of dynamic exposure monitoring.

Targeted exposure monitoring

Historically, tracking dynamic assets accurately has been a gap in most insurers skill sets. While most insurers use tools to help them know the location of their assets, linking these assets to their insurance terms and liabilities to see the impact on their business is rare. 

However, with advances in technology, there are now data management platforms like Insurwave that allow for insurers to dynamically track their assets, with live and historic aggregated exposure using a combination of data visualisation and advanced geolocation.

By using smarter aggregated exposure monitoring based on declared values, contracted terms and live tracking for dynamic risks, Insurers will be able to react quickly to potential events taking place and beyond that, help advise their clients faster and with more confidence. 

Greater accuracy and confidence is great, but what about 12-months from now when some new contextual data is available that you want to incorporate into your analysis? An extensible data model is key to ensuring that your technology continues to evolve alongside your strategy.

Dynamic event response

To illustrate the potential a dynamic exposure monitoring solution could have in the right circumstances, here are two key examples from the past and present where a more proactive solution could have improved the outcome. First up, Dubai Airport and the impact of the unprecedented rainstorms that put over $8bn of aircraft on the ground at risk of damage according to data and analytics firm Russell Group.

Dubai floods exposure monitoring

For aviation insurers looking to manage the exposures of their corporate insured clients, an unexpected event like this is an example of the potential impact of severe weather events on grounded aircraft, highlighting the need for robust data and analytics that shine a light on potential ground accumulation exposures across all airports. Using a dynamic solution that not only tracked but linked the insurance terms and other details would have been invaluable. 

Rather than simply increasing the rates for insuring commercial and residential property risks as part of a pricing review, (re)insurers could have taken steps to advise their clients of the potential hazards arising from such an accumulation with the added intelligence of third-party data and intelligence. 

Turning to the marine insurance sector, the wrecked cruise liner Costa Concordia, considered to be one of the biggest insured losses in maritime history, capsized off Italy’s west coast 12 years ago, resulting in 32 deaths and criminal charges being brought against the ship’s crew in addition to an oil spill causing further pollution and environmental liability. While many retrospective stories focus on the human-error of the crew, these events are rarely a result of one mistake but a series of them culminating in the event itself. 

Costa Concordia exposure monitoring

What could additional data points tell us and how could they inform better underwriting and more proactive exposure monitoring? In the investigative report on the 2012 disaster, Italy’s Ministry of Infrastructures and Transports found that the Concordia “was sailing too close to the coastline, in a poorly lit shore area […] at an unsafe distance at night time and at high speed (15.5 kts). Similarly, the vessel came into difficulty by performing what is known as a “sail-by,” and it’s unclear how often cruise ships perform these manoeuvres. Some consider them to be dangerous deviations from planned routes. 

The commonality among this evidence is that it is trackable and could be monitored with the help of technology. Had its insurers noticed the speed and unusual location of the vessel, could this have been communicated in time? This is uncertain, but the fact remains that being able to track assets with the help of more granular data points is more than likely a boon rather than a hindrance.

Patterns and behaviours

As the election year progresses, many insurers seek to identify patterns and behaviours in different areas to inform their pricing decisions. For example, insurers using data management platforms like Insurwave can create custom areas of interest or ‘zones’ around places where they wish to monitor their assets. But moving beyond this, insurers could use this visual intelligence to identify trends that emerge from the assets they insure, such as flight patterns, number of passengers, and even ground duration. 

While this may be immaterial at first, this added level of intelligence provides an opportunity to consider different pricing strategies or when considering volatility in different regions, could inspire new products or services to offer clients. For example, while cyber insurance has a relatively short history, originating in 1997, recent growth in offerings for cyber insurance has been catalysed by the advancing sophistication of cyber criminals and the tense geopolitical situation shaping the cyber threat landscape and posing a threat to global societies and democracies.

Real-time opportunities

The insurance industry's traditional underwriting assessment methods are inadequate for today's rapidly evolving risks. Real-time monitoring is essential, and dynamic exposure monitoring platforms like Insurwave present a number of exciting opportunities. These platforms fill the gap in tracking dynamic assets, empowering insurers to swiftly react to emerging events and provide informed guidance to clients.

Retrospective analyses underscore the importance of linking insurance terms to assets for proactive risk mitigation. Granular data points enable the identification of patterns and behaviours, informing pricing decisions and inspiring innovative product offerings.

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