I’m presenting at a joint Australian Property Institute and Spatial Industry Business Association (SIBA) seminar in June looking at the role of location intelligence in the area of natural disasters.
This year Australia and Asia Pacific countries have been hit by some of the worst natural disasters in recent history. The clean up bill from the Queensland floods alone is estimated at $5bn, with an indirect cost to the Australian economy of $9bn. The natural disasters in Australia have also ensured the spotlight has been shining brightly on the insurance industry in recent months, and in March, the federal government announced the Natural Disaster Insurance Review to provide a wide ranging review of natural disaster insurance in Australia.
The insurance review’s terms of reference are squarely targeted at how to ensure Australian people and businesses should be appropriately insured for natural disasters. However it’s of immense importance that, as Mike Wilkins, Managing Director and CEO of IAG, recently wrote, “we must build our resilience to catastrophe so we spend less of our limited resources on rebuilding and more on investing in the future.”
The spatial industry must play a key role in providing the expertise and technology to better assess and understand the risks from natural disasters, plan for resilience, and to respond to disasters. The upcoming natural disaster seminar is targeted at many industries including insurance companies, lenders, property developers, transportation and infrastructure companies, utilities, as well as bringing together local, state and federal government and emergency management agencies. This demonstrates the breadth of involvement in both adequately insuring for and building our resilience to future catastrophes.
Insurance companies are all about taking risks. An insurer cannot be averse to risk but does need to be able to appropriately understand and measure risk in order to underwrite policies.
My experience working with Australian insurance companies shows that the number one priority is gaining access to the necessary terrain models to understand natural disaster risk to allow them to provide appropriate flood cover. In Queensland in particular large parts of the state lack available flood modelling, leaving most insurers unable to provide cover.
That said, within the insurance industry the role of location intelligence is much broader than just understanding natural disaster risks. Location intelligence assists across the business in underwriting claims management, reinsurance and marketing. Location intelligence provides great efficiencies in claims management following major events. From being able to get early and accurate estimates of loss to being able to manage large teams of field assessors, the GIS becomes a core component of the claims management process. According to Patrick Snowball, CEO of Suncorp Group, the insurance companies were dealing with 100,000 claims directly resulting from the Queensland floods and Cyclone Yasi involving the co-ordination of hundreds of field assessors.
I feel as an industry it is partially our responsibility to educate the wider commercial sector, like insurance companies who have not been traditional users of GIS, about the power of location intelligence so that we can all work to build a more resilient Australia, one better educated about and better positioned to respond to future natural disasters.
– Gary J