The insurance industry is on the brink of a data deluge thanks to the imminent launch of several new Sentinel satellites that could bring a huge increase in the volume and quality of useful information available to underwriters and risk managers.
With around 30 years of experience developing and implementing Earth observational satellites, the European Space Agency is due to launch a series of new satellites as part of its Global Monitoring for Environment & Security (GMES) programme.
The Sentinel Mission
The first of these new satellites, Sentinel 1, is scheduled for launch in 2013.
The information beamed back from Sentinel 1 could benefit marine underwriters, for example, giving them access to better sea ice mapping and ship detection. Similarly, energy underwriters could benefit from the ability to monitor oil spills. Meanwhile earthquake risk assessments could take advantage of the ability to monitor the motion of the land surface. Agriculture insurers can look forward to better mapping of forests, water resources and soil conditions.
A year later Sentinel 2 will provide, better images of vegetation, soil and water cover across the earths surface, including inland waterways and coastal areas. These high-resolution images will enhance our understanding of land cover to help us control exposures and detect changes over time.
Sentinel 2 (planned for launch in 2014) will also provide information to the emergency services.
In addition, the prospect of high-quality images of floods, landslides and volcanic eruptions will send ripples of anticipation through the catastrophe risk management sector.
Applications of Space Data
It’s encouraging to see the insurance industry beginning to harness and use a broad range of space-based data. At Willis we are already using space-derived data in three main areas:
- To represent exposures
- To create risk indices
- To respond to natural catastrophes
For example, after the horrific earthquake and tsunami in Japan in 2011 we used satellite images to ascertain where impervious (i.e. water-resistant) surfaces were and used this as a proxy for urban areas, which allowed us to make more accurate estimates of the losses than we would have been otherwise able to do.
Our Australian bushfire risk index, used to map the extent and type of vegetation across large areas, is based on NASA’s Geocover Landsat 7 satellite data.
As we move forward, technological advances are rapidly removing obstacles to taking advantage of this data. Historically the volumes of data required would have demanded huge storage and computational overheads. These costs would sometimes prohibit investment. Now, the advent of cloud computing is helping to resolve these issues.
More favourable data use and exchange policies should also help to alleviate some of the licensing complexities which we face to fully commercialise the use of space-based information.
If anything, while the challenge is still sheer volume of data, it is also a sheer volume of opportunity.
The key, of course, will be our ability to turn all of this new data into useful facts and figures that we can use to inform our risk based decision making.
Within grasp is the opportunity to more accurately represent hazards around the world and to respond more effectively to natural disasters – and that is a prize worth striving for.