Technology

Bringing Visual Intelligence to Weather-related Claims

Black man's hands typing on computer with smartwatch and black cell phone

By Julio Pernía Aznar, CEO of Bdeo

Climate change has contributed to the intensification of extreme weather events, leading to more frequent and severe damage to properties and infrastructure. According to a report by Bloomberg Intelligence, claims for weather-related incidents are set to exceed $100 billion for the third year in a row, as floods, hail and wildfires linked to climate change occur more often. Swiss Re Institute estimates that severe thunderstorms alone accounted for up to 70% of the $50 billion in natural catastrophe losses in the first half of 2023.

The geographical distribution of extreme weather events is also expanding. Areas previously considered low-risk are now experiencing higher levels of exposure to extreme weather conditions. This geographical shift has caught many insurers off-guard, as they now have to address weather-related claims in regions where they may have less expertise and historical data to rely on, also creating an underinsurance crisis.

In the first half of 2023, only 12% of natural disaster losses in Europe were covered.

Regions that were once known for their mild climates have experienced unexpected and severe weather events. For example, areas that rarely saw snowfall are now facing blizzards and freezing temperatures, resulting in claims for burst pipes, roof collapses and other damages. During the second half of July 2023, the European record for the largest recorded hailstone was broken twice.

Insurance companies must quickly adapt to changing environmental conditions and develop new strategies to handle the influx of weather-related claims. However, the expansion of extreme weather events into previously low-risk areas further complicates the situation, requiring innovative solutions to effectively handle the growing number of weather-related claims.

Navigating High Volumes of Weather-related Claims

Handling weather-related claims comes with its own set of challenges for insurers. Firstly, the sheer volume of claims can overwhelm insurance companies, especially during periods of heightened weather activity. Secondly, the need for speed is crucial in weather-related claims. Still, assessing the extent of damage caused by weather events can be time-consuming and complex, especially if done manually by human inspectors, leading to delays in settlements and dissatisfied policyholders.

Traditional damage assessment methods which rely heavily on manual inspections and evaluations are not only slow but also prone to human error. Too many manual steps slows down the claims process during a time when policyholders often require immediate financial assistance to start fixing damages. Delays in payouts also mean a painstakingly slow recovery process for affected communities as a whole.

Weathering the Storm with Visual Intelligence

Advancements in artificial intelligence (AI) are paving the way for innovative solutions to tackle these challenges and streamline the claims process after weather-related events. In particular, visual intelligence, a form of AI computer vision that can analyze image and video evidence remotely, has emerged as a powerful tool in tackling the challenges associated with weather-related claims.

By allowing policyholders to submit visual evidence of damaged property remotely from any mobile device, insurers can quickly help assess the extent of damage and expedite the claims settlement process. As a form of advanced computer vision technology, visual intelligence can help manage claims related to an array of property damage, such as leaks, water intrusion, or damage to glass. It is also capable of interpreting documents such as invoices and digitizing the information to later carry out geolocation and fraud checks.

AI algorithms can also help identify suspicious behavior and alert insurers to potential fraud cases through analysis of patterns and anomalies in claim data. This not only prevents fraudulent payouts but also helps maintain the integrity of the insurance system during particularly challenging times.

As the frequency and severity of weather-related claims continue to rise, insurers can leverage AI, and specifically visual intelligence, to handle higher volumes of claims and perform increasingly complex damage assessments in less time.

Improving the Insurance Experience Before and After a Storm

Weather-related claims pose many difficulties for insurers, but with the help of AI technology like visual intelligence, these challenges can be overcome. Especially as extreme weather events continue to occur more frequently, AI will undoubtedly continue helping the insurance industry adapt while maintaining a high-quality customer experience.

About the author:

Julio Pernía Aznar

Julio Pernía Aznar is the CEO of Bdeo, a technology company transforming the insurance and fleet industries and the way they engage with their customers through Visual Intelligence solutions.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.