Our latest report, 'Location Intelligence 2021 - the Companies to Watch: Where, what and how risky?', offers a comprehensive look at the technology helping insurers identify and manage risk, plus profiles of more than 50 companies that are leading the way in the provision of location intelligence.
Location Intelligence 2021 - Introduction by Matthew Grant
Insurers now have a huge amount of choice of technology to help them make money, save money or satisfy regulators. But even the best technology is useless if we don’t know what it is we are insuring, where it is, what it’s made of and what might cause it to break.
Up until about 30 years ago insurers were using location information that hadn’t improved much for over 100 years and no one really seemed too bothered. Then in 1989 a major windstorm hit the UK. Hurricane Andrew, a category 5 storm, made landfall in Florida in August 1992. Two years later, in 1994, the Northridge Earthquake caused $12 billion of insured loss in Los Angeles.
Insurers started to realise, with a hefty nudge from regulators and rating agencies, that better location intelligence could improve risk selection, reduce aggregation and, with the availability of catastrophe models, help them buy reinsurance more efficiently. Microsoft had launched Excel 7 years earlier. Spreadsheets became state of the art for sharing and managing location information (sometimes it seems they still are). Reinsurers demanded improvements in the quality of data they used to price risk and brokers identified the advantage to be had from sharing better information between counterparties. Over the next few years more major natural disasters occurred around the world and catastrophe models for hurricanes and earthquakes in the US, Europe and Japan evolved quickly.
We were on the cusp of the dot com revolution. Technology was becoming available which could democratise decision making by providing access to powerful analytics, drawing on plentiful sources of new data. Surely the time of building level location intelligence had arrived?
But never mistake a clear view for a short distance. Whilst there is no doubt that, thirty years later, insurers understand the importance of high-quality location information and are prepared to pay to get it, insurance has a slow heartbeat. If data is the new oil, location intelligence has been the Brent Crude of fossil fuels, hard to extract and expensive to refine.
Now as we enter 2021 it feels like the technology, interest, funding and importantly, the enthusiasm for better information is converging. Identifying, extracting and sharing the data really is opening up new opportunities for better risk protection for insurers, homeowners and businesses around the world. In the last five years, since the founding of InsTech London, we have seen acceleration in the emergence of new ideas, fresh innovation and people building successful businesses around these ideas.
What follows is a look into what is happening in location intelligence today through the lens of our experience and the companies we know from around the world. Through our events, interviews and regular discussions we are learning from some of the best technology companies, new and established. We’ve selected over 50 companies for this report that we believe represent the leaders in the provision of location intelligence.
In the world of location intelligence the pulse rate is increasing but nature and man still holds surprises for us. At the time of writing, the insured losses from the Texas power failure and resulting freeze earlier this year are estimated to be approaching $20bn. Did anyone see that coming? We will be back in 2022 with an update.
This report is the third in our ongoing series from InsTech London. Tell us what or who you would like to be in here. Better still, join as a member and let us share your stories too.
Where, what and how risky? Watch our Location Intelligence Live Chat
Matthew discussed the findings from the report in an InsTech London Live Chat on Thursday 1 April.
He was joined by:
- Mark Cunningham, Co-founder & Director, WhenFresh
- Charles Blanchet, Vice President of Solutions, ICEYE
- Kevin Van Leer, Director of Customer Success, Cape Analytics
- Patrick Kelahan, Building Consultant, H2M architects + engineers
The event is available to watch on-demand on the InsTech London BrightTALK channel.