Issues & Answers Special Advertising Section
September 2019

Issues & Answers: Insurtech for Extreme Events

Jay Rosario, Senior Vice President, Strategic Products, for Munich Reinsurance America, Inc., said he sees a lot of potential from the data and analytics coming out of the insurtech space. “It’s very accurate and up-to-date and the computing power to analyze it is the future of the industry,” he said. The following are excerpts of an interview.

Jay Rosario

Jay Rosario
Senior Vice President Strategic Products
Munich Reinsurance America, Inc.

“We're in a changing risk environment. Society is not adapting as quickly as the risk is increasing, so we’re working harder than ever to develop solutions to manage the risk.”

What are some of the key risk trends Munich Re is following right now?

We’re following the increasing frequency and severity of extreme events. For example, in 2017 we saw record-setting hurricane losses from Harvey, Irma, and Maria; the following year the losses from hurricanes Michael and Florence were also substantially more severe than the long-term average. Hurricane Harvey was one of the worst flooding events in U.S. history with 60 inches of rain over five days. The $30 billion of losses from the California wildfire events in 2018 were three times the total wildfire losses in the U.S. since 1990. The increased frequency in extreme events is a trend that we anticipate continuing in the future.

Do you have any specific examples of the types of insurtech data and analytics that Munich Re is focused on?

We are very focused on location intelligence. This is data on the characteristics and conditions of buildings and at locations that can enhance how we underwrite property risks and develop new products. We’re also very focused on computer vision, which is extracting data from images. In most cases by utilizing computer vision we can get to much more accurate and up-to-date information than through traditional sources. It’s also a very efficient way to gather new data at scale.

Are there other things that Munich Re can do to respond to extreme events?

We’re looking at different types of products that can help provide funds for evacuation or extra living expense. A lot of these solutions can be parametric in nature, with no deductible, with the goal of getting the funds to affected policyholders as quickly as possible. Our innovation lab is coming up with claims management solutions using remote sensing technologies that address the catastrophe situation and speed up the claims process.

What is remote sensing and how does it work?

The auto claims process can demonstrate, in a simplified manner, how remote sensing works. When you report a claim resulting from an automobile accident, many insurance companies offer customers the option to take photos of the vehicle and get a preliminary estimate very quickly. Remote sensing is similar. It offers re/insurers a preliminary estimate of the damage caused by a hurricane. In our case, we get the aerial imagery from the Geospatial Intelligence Center. They fly in after the hurricane has moved through and take aerial images of the affected areas. Then we process those images using computer vision and machine learning. We identify the insured homes in the images, detect any damage and even classify those damages, many times before the First Notice of Loss has been received. There could be hundreds of thousands of homes and images to process, and our solution does it within minutes.

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