geo-intelligence in the insurance industry - D-GEO

Image: used under license from Shutterstock.com
GEO-INTELLIGENCE IN THE INSURANCE INDUSTRY
30. D-GEO Workshop in München
18th June, 2015
Andreas Siebert
Corporate Underwriting – Head Exposure Analytics & Geospatial Solutions
Agenda
01
02
03
Challenges for the
insurance industry
What does
Geointelligence signify?
Geointelligence within the
insurance value chain
Image: used under license from Shutterstock.com
Image: used under license from Shutterstock.com
Image: used under license from Shutterstock.com
04
05
06
Geospatial analytics
for risk managers
Innovative outlook and
key-takeaways
NATHAN Live Demo
Source: NASA
Image: used under license from Shutterstock.com
Image: used under license from Shutterstock.com
01 Challenges for the
insurance industry
Geointelligence and NATHAN
3
Image: used under license from Shutterstock.com
Herausforderungen der Industrie –
Die größten globalen Geschäftsrisiken 2015
Allianz Global Corporate & Speciality, 2015
NatCatSERVICE
Loss events worldwide 2014 (980)
Geographical overview
Winter damage
North America, 5 – 8 January
Severe storms
USA, 12–14 April
Severe storms
Europe, 8–10 June
Floods
United Kingdom,
December–February
Earthquake
USA, 24 August
Typhoon Rammasun
Asia, 11–22 July
Floods
Europe, 13–30 May
Floods
China, 11–20 July
Drought
USA, January–September
Winter damage
Japan, 7 – 16 February
Floods
USA,11–13 August
Severe storms
USA, 18–23 May
Drought
China, July – August
Hurricane Gonzalo
Carribean, 8–10 June
Floods
China, 24–28 May
Severe storms
USA, 2–4 April
Severe storms
USA, 27 April–1 May
Source: Munich Re, NatCatSERVICE, 2014
Cyclone Hudhud
India,
11–13 October
Floods
Italy,
31 January–11 February
Severe storms
USA, 3–5 June
Loss events
Selection of catastrophes
Drought
Brazil, Decemeber – March
Floods
India, Pakistan,
3–10 September
Geophysical events
(Earthquake, tsunami, volcanic activity)
Meteorological events
(Tropical storm, extratropical storm,
convective storm, local storm)
© 2015 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE – As at October 2014
Earthquake
China, 3 August
Hydrological events
(Flood, mass movement)
Climatological events
(Extreme temperature, drought, wildfire)
Herausforderungen der Versicherungswirtschaft
(non location-based)
 Rechtliche Veränderungen
 Erhöhte Risikotransparenz erforderlich (Solvency II, BAFin)
 Veränderter Wettbewerb; neue Marktteilnehmer; Marktstagnation oder –rückgang
 Marktschwankungen (Wechselkurse)
 Kosten- und Effizienzdruck im Kerngeschäft
 Demographischer Wandel
 Cyberkriminalität
 Globalisierung und Rückwirkungsschäden (CBI, contingent business
interruption)
Herausforderungen der Versicherungswirtschaft
(location-based)
 Kumulkontrolle: früher vor allem aus der Sachversicherung, heute zunehmend
durch weltweite Abhängigkeit von Risiken untereinander auch
Haftpflichtrisiken
 Beobachtung: Zunahme / Intensität von Schäden aus Naturkatastrophen
 Zunahme von Wertekonzentrationen in risiko-exponierten Gebieten (Kumule)
 Erhöhte Risikotransparenz gefordert (Naturgefahren-Modelle)
 Komplexe Wechselwirkungen und Erhöhung der Empfindlichkeit in den
Wirtschaftsprozessen (z.B. Lieferketten schwer zu modellieren)
 Veränderungen in der globalen Risikolandschaft: neue, bisher unbekannte z.B.
durch Technologiewandel, Pandemien, Überalterung von Infrastrukturen)
Differences in insurance „density“
Economic vs. insured losses
28%
8%
43%
5%
Continent
North-
Overall
losses
in bn US$
10%
1.500
38%
America
South-
126
America
Europe
608
Africa
44
Asia
Australia/
1.700
138
Oceania
© 2015 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE – As at February 2014
Overall losses
Insured losses
Hot Spots and Accumulation Issues
Monitoring of value concentration areas (e.g. industrial estates)
Better understanding of risk vulnerabilities
Explore vulnerability interactively in the map
Better understanding and risk transparency
of supply chains
Sub-Supplier
Sub-Supplier
Supplier A
Sub-Supplier
Supplier B
Sub-Supplier
Sub-Supplier
Supplier C
Production
Energy
Consumer A
Source: Andreas Siebert, 2011
Sub-Supplier
Consumer B
Consumer C
Increasing complexity of our business
Interdependencies in global trade and supply chains
External
Drop in Sales/
Revenue
Legislation/Regulation
Change
Exchange Rate
Fluctuation
Financial Risks
Customer Chum
by Rumor
Internal
Interest-Rate
Fluctuation
Going Concern
Lost of Reputation
/Brand
Liquidity Assets
Assets Value
Variability of
Stock Price
Intellectual
Property
Credit Rating
Hazard Risks
Joint Venture
Marketing
Cash Flow
Events
Earthquake
& Tsunami
Strategic Risks
Sales Channel
Contractual
Health & Safety
Liability
Supply Chain
Contamination
Products Quality
Loss of
Stoppage of Public
Account
Nuclear Utilities Supply
Employees
Management System
Plant
Liability
Contamination
Product Recall
Human Resources
Occupational
(outflow)
Accident
Property Damage
Lawsuit
Compliance Issues
Operational Risks
Business Interruption
A catastrophe is triggering multiple losses along the value chain
Source: Marsh Inc., 2011
02 What does Geointelligence
signify?
Geointelligence and NATHAN
13
Image: used under license from Shutterstock.com
What does Geointelligence signify?
Business intelligence & Geointelligence
Holistic approach
What?
Business intelligence
(can be any insurance
information)
Insurance business
Data (Big Data)
Who?
How many?
Geointelligence
(can be any spatial
information)
Where?
Principle of GIS is connecting data sources
Aerial and satellite imagery
Insurance data (liabilities distribution)
Post codes
Number of risks
70
71
72
73
74
75
76
77
78
79
Socioeconomic data
267
398
370
299
241
180
561
406
248
624
Sum insured EUR
48.636.000
83.308.000
80.104.000
61.532.000
41.696.000
38.214.000
114.108.000
79.198.000
34.268.000
128.662.000
Mobile-tools (with GPS)
Geospatial
Analytics
Hazard data
Claims and event information
Improved risk
transparency
Source: Munich Re
The importance of Geocoding Accuracy
Accuracy depends on your business needs and availability of client data
Postal Code Centroid / City Centroid
Accuracy
Source: Munich Re, GfK Geomarketing
Street Address Interpolated
Address Point
Source: Munich Re, GfK Geomarketing
Herausforderungen der Geo-Community
4-Phasen der GIS-Integration
I. Nerd Phase:
Experts only
II. Touch Phase:
Supporters join
Business
GIS
Business
GIS
III. Integration Phase:
Community forms
Business
GIS
IV. ROI Phase:
Return can be measured
Business
GIS
Quelle: Andreas Siebert, Munich Re, 2014
03 Geointelligence within the
insurance value chain
Source: Munich Re
High demand of geospatial services and analyses
across the organization…
Claims
Portfolio
Management
IT / Data
Management
Actuarial
Product
Marketing /
Sales
GIS
Legal
Geographic Information Systems (GIS)
aligns teams by facilitating communication and understanding
Geointelligence in the insurance business
Value chain
Product
development
Sales and
marketing
Risk
identification
Risk
management
Risk
assessment
Modelling,
rating,
budgeting
Claims
management
Risk
accumulation
control
Geocoding – Visualize your single risk location
Single risk identification
Source: Munich Re
Geocoding – Visualize your global distributed Portfolio
Multi risk identification
Source: Esri, DigitalGlobe, GeoEye, i-cubed, USDA, USGS, AEX, Getmapping, Aerogrid, IGN, IGP,
swisstopo, and the GIS User Community
Worldwide single risk evaluation
Single risk assessment
Worldwide multi risk evaluation
Multi risk assessment
Example for earthquake is transferable to all
Natural Hazards!
Source: Esri, DigitalGlobe, GeoEye, i-cubed, USDA, USGS, AEX, Getmapping, Aerogrid, IGN, IGP,
swisstopo, and the GIS User Community
Quantitative evaluation of exposed
locations using the example of
earthquake hazard
EQ
Locations
Sum PD TSI
Loading
Zone 0
120
7.163.044.720
0
Zone 1
70
3.970.989.382
?
Zone 2
43
1.849.545.546
?
Zone 3
17
556.629.741
?
Zone 4
4
7.922.628
?
Sum
254
13.548.132.017
Risk = F (Hazard, Vulnerability, Exposed Values)
Modelling, rating, budgeting
Scientific input
Source: Gfk Geomarketing, Munich Re
Hazard information
Individual
exposure
Source: Gfk Geomarketing, Munich Re
Set of
scenarios
Expected loss /
loss occurrence
probability
Value distribution
Loss experience
Vulnerability functions
Risk curve
Statistics
New technologies are creating new risk accumulations
Identification of „unknown“ accumulation
Risk accumulation control
Photovoltaic systems in South-West Germany
2000
2010
Number of photovoltaic installations: ~ 1900 units
Number of photovoltaic installations: ~ 110.000 units
Source: esri
Source: Munich Re
Source: esri
Geointelligence in the insurance business
Value chain
Product
development
Sales and
marketing
Risk
management
Claims
management
Quantitative loss estimation example
Claims loss estimation
Demo Footprint Analysis
Hurricane Irene (August 2011)
Number of Risk
Locations
Percentage
Source: esri
Source: Munich Re
Affected by Irene
14.000
58 %
Not affected by Irene
10.000
42 %
Sum
24.000
100 %
Using event footprints to optimize claims management
Claims management
 Verification of reported claims with event footprints
 Short term estimation of portfolio losses after catastrophes
 Visualisation of reported claims
 Fraud prevention: identification of potential cases of fraud (using footprints)
Source: Munich Re
04 Geospatial analytics
for risk managers
Geointelligence and NATHAN
30
Source: NASA
Location based services for risk managers
Main GIS-application fields at Munich Re
Internal Solutions
„visible“
RiskMapper
Client Services
NATHAN
Internal Solutions
„invisible“
GeoData-Services
RiskMapper: The data dashboard allows to combine
many underwriting information
Industrial Parks
Portfolio Data
+
Event
Footprints
NATHAN
Hazard Maps
Critical
Infrastructure
Industry
Location
Database
From data generator to data orchestrator and solution provider!
RiskMapper: Functionalities
Portfolio Upload (Aggregated data or treaty business)
RiskMapper: Applications
Visualization of property exposure data with density maps
RiskMapper: Applications
Hazard analysis of industrial facilities to identify hot spots
RiskMapper: Functionalities
Use real-time data to improve the „risk radar“
RiskMapper: Applications
Monitoring of industrial estates in flooded areas
RiskMapper: Functionalities
Create surface profiles to identify the flood impact
RiskMapper: Applications
Applying event footprints for claims assessment and estimation
Munich Re‘s NATHAN Risk Suite
From Wallmaps to innovative and fully integrated mobile solutions
1978 / 1988 / 1998 / 2009 / 2011
Source: Munich Re
2012 / 2014 / 2015
NATHAN Risk Suite tools
NATural Hazards Assessement Network
 NATHAN World Map of Natural Hazards
The wall map illustrates the natural hazards
distribution.
NATHAN
World Map
of Natural
Hazards
NATHAN
Risk
Consulting
NATHAN
Mobile
 NATHAN Single Risk and Portfolio
Risk The online tool supplies NatCat risk
assessment for single and portfolio risk on
address level via Munich Re’s client portal.
NATHAN
Risk Suite
NATHAN
Premium
NATHAN
Single Risk
NATHAN
Portfolio
Risk
 NATHAN Mobile
The tool provides mobile NATHAN access
for single risk assessment on address level.
 NATHAN Premium is the premium service
for NatCat portfolio risk assessment
tailored into clients’ interface.
 NATHAN Risk Consulting: personal
expert know how to help introducing
geointelligence at clients’ site.
NATHAN Portfolio Risk Assessment
Online PDF Report
US Single Risk Location in St. Louis
Riverflood
Source: JBA, Munich Re | DigitalGlobe, GeoEye, Microsoft, CNES/Airbus DS | Esri, HERE
To further expand NATHAN‘s competitive position
various innovations are planned for 2015
Most important improvements realized in 2015
New Risk Index for
Earthquake, Storm and Flood
Planned major innovations 2016
Mobile solutions
Major NatCat loss event Footprints for loss
estimations
New heat maps and interactive circle for worldwide exposure
and accumulations control
Source: Munich Re
Source: JBA Risk Management, GfK Geomarketing
Planned update of global flood maps
Significant upgrade of the Global Flood Maps
1. New NATHAN flood maps (rivers) remodelled using full 2D hydraulic model and DTM
NEXTMap 5m DTM data – resampled on 30m
2. New NATHAN flood maps now include all rivers (no minimum catchment size), using 2D
hydraulic modelling approach on DTM
Current NATHAN flood maps [100yr RP]
Source: ESRI; JBA
Planned flood maps [100yr RP]
Source: ESRI; JBA
05 Innovative outlook
and key-takeaways
Source: used under license from Shutterstock.com
Datengewinnung einst…..
Datengewinnung heute…..
…immer mehr Daten
…immer genauere Daten
…immer schnellere Datenverfügbarkeit
…und neue Technologien
Quelle: http://www.welt.de/wissenschaft/article122957094/Was-Drohnen-alles-koennen-aber-nicht-duerfen.html
Neue Plattformen und Lösungsarchitekturen
Erfolgsfaktoren für “Geospatial Underwriting”
 Management Awareness und Commitment (“innovative big data project”)
 IT-Unterstützung und Geo-Knowhow
 Workflow-Verständnis bei den Geospatial-Experten
 Einfache Integration der Geo-Lösung in bestehende IT-Landschaft
 Datensicherheit auch bei Geodaten (Cloud-Diskussion)
 Geodaten-Verfügbarkeit und –standards; Qualität und Kosten
 Anwenderfreundlich – “Underwriter-tauglich”
Geospatial-Technologien unterstützen sehr gut das Geschäftsmodell der Branche.
Big Data und Industrie 4.0 können jetzt zum endgültigen Durchbruch führen.
06 NATHAN Live Demo
Image: used under license from Shutterstock.com
NATHAN Live Demo
Getting started: Log-in via nathan.munichre.com
Source: Munich Re/Bild: Martin Hendriks/Getty Images
© 2014 Münchener Rückversicherungs-Gesellschaft © 2014 Munich Reinsurance Company
Thank you very much for your attention!
Andreas Siebert
[email protected]
Image: used under license from Shutterstock.com
Disclaimer
Münchener Rückversicherungs-Gesellschaft (Munich Reinsurance
Company) is a reinsurance company organised under the laws of
Germany. In some countries, including in the United States, Munich
Reinsurance Company holds the status of an unauthorised reinsurer.
Policies are underwritten by Munich Reinsurance Company or its affiliated
insurance and reinsurance subsidiaries. Certain coverages are not
available in all jurisdictions.
Any description in this document is for general information purposes only
and does not constitute an offer to sell or a solicitation of an offer to buy
any product.