At the close of 2023, Swiss Re reported that global insured losses will likely exceed the $100 billion threshold for the fourth consecutive year. By now, it’s old news to be surprised by this outcome, and some patterns have established themselves in the past few years: 

• It’s hot! 2023 marked the hottest summer since global records began in 1880. This exacerbated fire conditions in California and Hawaii, and heat waves occurred worldwide.‍
• It’s wet! Alongside these blistering days, El Niño also pushed sea surface temperatures upward, and climate scientists expect these conjoined phenomena will bear fruit through the spring of 2024 – cooler, wetter conditions to the American Southwest.

In the insurance industry, we’ve come to talk about these as “secondary peril” events that are upstaging the typical primary perils that have historically caused the bulk of losses, like hurricanes and earthquakes. In many ways, these smaller but more frequent secondary peril events have come to feel like a death by a thousand papercuts.

Alongside all of that, human phenomena have exacerbated the already perilous situation. For one, the development of structures in the wildland-urban interface has led increased risk of burning than equivalent homes elsewhere. For another, urbanization has increased the amount of impervious surfaces, increasing the risk of catastrophic floods. 

So for claims professionals, this is pretty much a worst-of-both-worlds scenario. The number and frequency of events are increasing, the cost is increasing, and as a society, we’ve been a little slow on the uptake on how to build more durable homes, retrofit existing ones, or educate homeowners on how to mitigate their own risk. 

In short, more claims are coming. 

Avoidance of risk via robust underwriting analysis will always be the best offense against losses, but having the right claims technology remains critical. Claims analytics technology can reduce cycle times and the number of customer touchpoints — all while prioritizing adjuster time and ensuring their safety in potentially hazardous conditions. 

With that in mind, here’s the top five things to keep in mind for claims in 2024: 

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1. Don’t wait until after the storm has passed. Start planning from the first weather forecast. 

Sometimes, an oldie is a goodie. Weather forecasting has gotten better and better as the decades have gone on. As a recent example, in 2020, Hurricane Laura was predicted 3 days ahead of time to make landfall at Cameron, Louisiana, at 2am. It arrived 1 hour ahead of schedule and a mere 3,000 feet away. The level of bulls-eye accuracy about when and where certain events may occur is powerful, and leveraging this can be a game-changer. 

Platforms like Arturo can pair these highly accurate weather forecasts against your current book of business, allowing you to prepare. You can notify your adjusters, allocate them to certain geographies and manage capital. 

2. Proactively make recommendations for disaster preparedness.

Weather forecasts can also be used to prepare your customers. Sometimes, policyholders may overlook some easy ways to prevent damage to their homes. Being able to easily filter your portfolio by, say, the number of policyholders who have trampolines, can be a great way to reach out and let them know to take those indoors so they don’t fly around in a storm. 

And when out-of-the-norm events occur, like the 2021 Texas Freeze, residents can be unfamiliar with what to do or how to keep their homes safe. Icy and snowy conditions in a warm-weather state could become an opportunity for helpful advice, like to keep taps running, keep the indoors warm, or if you’re leaving your home, to winterize and drain the pipes. 

3. Identify current policy patterns to predict future claims.

As a catastrophic event unfolds, and the claims start to roll in, you can view these claims as a component of your book of business. This can be a helpful way to understand where localized patterns are occurring and where damage may be worse. 

In a hail event, for instance, car claims often come in ahead of house claims, as hail damage on a vehicle is easier to see than on a roof. Seeing which policies in your book have both a home and auto policy that has a claim on one of them but not the other may be predictive of where future claims may be filed.

4. Detect damage with “gray sky” flights or synthetic aperture radar.

And lastly, with the wealth of remote imagery capture options available, from aerial to synthetic aperture radar to even cell phone, it can be easy and fast to understand damage without setting a single foot on the ground.

AI-powered damage detection models can analyze imagery from “gray sky” flights (which photograph the earth on-demand) to triangulate where exactly new damage may be, detecting things like tarp presence, missing shingles, shattered solar panels, and more. And from new applications with synthetic aperture radar, providers like ICEYE can actually “see” flood levels rise and fall or even quickly know whether a building has completely burned down in near-real time.

Arturo strategically partners with these types of companies so carriers can understand the past, present and future of a property all from one platform.

5. Use “blue sky” flights to help suss out fraud. 

Lastly, regularly monitoring home conditions can help with keeping a system of record on when a given condition first appeared on a property. For instance, if a tarp was present on the roof before the storm, that contextual information can help with determining whether a roof claim is fraudulent. 

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Proven Technology that Works 

The technology to hasten the claims process is here today, but this doesn’t mean leaving humans to the wayside. At its best, utilizing AI technology is a symphony of machines and humans working hand-in-hand, with each focusing on what they’re best at to achieve better outcomes overall.

We’ve seen this methodology yield powerful outcomes with one of our customers, the second-largest carrier in Australia, Suncorp. By using our highly intuitive platform and leveraging a blend of artificial intelligence, synthetic aperture radar, and their own incredibly smart employees, they stand at the forefront of disaster management — and early results have shown partnering with Arturo saved them at least 1 week in responding to catastrophes. 

Instead of relying on people to manually process simple claims, or worse, multiple screens filled with Excel sheets that need to be cross-referenced to determine which policies may be affected, claims professionals can focus on utilizing their years of experience to address the challenging claims or providing a human touch in hard times.

The way a claim is handled directly affects customer satisfaction — and according to a McKinsey study, satisfied customers are 80% more likely to renew their policies. 

By keeping these technological applications in mind and exploring how they can transform your business, you can be better prepared for the future — competition, climate or otherwise — from 2024 and beyond.

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