How to Use Climate Tech to Save Your Insurance Business
As an insurance executive, you know that climate change is disrupting the industry. Extreme weather events are causing property damage and driving up claims costs, making it harder to provide affordable coverage to your customers. But what if you could use technology to predict and prevent these events before they happen? That’s where climate tech comes in.
According to a recent report by Oliver Wyman, insurers have the power to reduce overall weather-related losses and protect their existing markets by playing a larger role in increasing resilience. This presents a $71 billion annual revenue opportunity for the insurance industry. So, how can you take advantage of this opportunity and use climate tech to save your business? Here are five steps to get started:
- Invest in sensors and IoT devices connected to people, homes, and property.
These devices can provide real-time data on weather conditions and potential risks, allowing you to take proactive measures to prevent damage and reduce claims costs. For example, you could use sensors to detect leaks in a customer’s home and alert them before the damage becomes severe.
- Use more accurate weather forecasting.
Improved weather forecasting can help you predict and prepare for extreme weather events, reducing the impact on your customers and your business. You could partner with a weather forecasting company to provide your customers with personalized alerts and recommendations based on their location and risk profile.
- Consider parametric insurance.
Parametric insurance pays out based on predefined triggers, such as wind speed or rainfall, rather than actual losses. This can help you provide coverage to customers in high-risk areas where traditional insurance may be too expensive or unavailable. With Riskwolf, you can turn real-time data into insurance and build and operate parametric insurance at scale.
- Leverage catastrophe planning and management software.
Catastrophe planning and management software can help you prepare for and respond to extreme weather events more effectively. You could use this software to create detailed emergency response plans, track claims and repairs, and communicate with customers in real-time.
- Use data-driven decision making.
Data-driven decision making can help you identify trends and patterns in weather-related losses, allowing you to adjust your underwriting and pricing strategies accordingly. You could use machine learning algorithms to analyze historical data and predict future losses, or partner with a data analytics company to gain insights into your customers' risk profiles.
By following these five steps, you can use climate tech to transform your business and position yourself for success in the rapidly transforming new economy. Don’t wait until it’s too late – start investing in climate tech today and protect your business from the impact of extreme weather events.
Read the original article by Stephen Applebaum and Alan Demers on Insurance-Canada.ca to learn more about the role of climate tech in the insurance industry. And if you’re ready to develop parametric insurance for your business, get in touch with Riskwolf today. With our unique real-time data and dynamic risk modelling, we can help you turn climate tech into a competitive advantage.