Predictive analytics at the heart of industry strategies to overcome the risks of environmental accidents. But the Italian Insurtech Association raises the alarm: "400 million are missing from the appeal to accelerate innovation" 21 Jul 2022 L. O.
More innovation for Italian insurtech. Big data, artificial intelligence and space innovation will turn the industry around making it able to face the challenges related to climate change. But more investments are needed: according to the Italian Insurtech Association, 400 million are missing from the appeal to develop technologies capable of mapping risks and stipulating adequate policies. Index of topics • The cost of environmental disasters • Insurtech at the change of pace • From satellites to data analysis • Insufficient Italian investments The cost of environmental disasters Environmental disasters are among the biggest challenges facing the insurance industry. It is estimated that globally environmental accidents resulted in losses of 343 billion dollars in 2021, of which only 38% were covered by insurance.
Digital innovation, reads the note of the Italian Insurtech Association, "can help the industry to develop solutions capable of carrying out predictive analysis to support the supply chain against the effects of climate change". But in the coming years the big players in the insurance world will have to invest at least 400 million euros to develop new technologies in the field of Space Innovation, Artificial Intelligence and Big Data that will help map risks related to environmental disasters and stipulate adequate services and policies. Insurtech at the change of pace It is the prevention services, and no longer the "simple reimbursement of the damages suffered due to environmental disasters", says IIA, that must be at the center of the new strategies. "The role of insurance - reads the note - "must therefore adapt to these needs, passing from a passive actor oriented mainly to compensation to an active protagonist in guiding the customer from estimation to accident management, providing compensation for any business interruption". Digital innovation in insurance accelerates this transition, leveraging a combination of satellite technologies, AI and big data analytics. But according to IIA it is necessary to increase investments in technology, to stimulate the development of the market and bring Italy on a par with other European countries. From satellites to data analysis Thanks to satellite images that are analyzed by AI-based software, according to the experts of the association it is possible to create predictive models for the analysis of the collected data and provide a forecast of any natural damage. The data is then used to provide comprehensive coverage of risks and support adaptation and mitigation strategies for accidents in urban and rural areas. Platforms for the digital management of cat bonds can automate and speed up processes by providing smart contracts for instant settlements. "To date, there are already several Italian companies that are developing highly innovative solutions that use climate and meteorological data, coming from satellites in orbit, in order to provide parametric insurance products that compensate for monitored and measured events for a more adequate risk management – comments Gerardo Di Francesco, Founder & General SecretaryFounder & General Secretary – Italian Insurtech Association –. The startup SaferPlaces, for example, uses satellite data for the analysis of flood risk in urban areas by creating flood danger maps for different scenarios". Insufficient Italian investments "Investing in companies that work on innovative solutions in this field becomes a priority – explains the association -; in Italy, investments in startups are around 10 million euros according to data from the Insurtech Investment Index 2021, an insufficient figure, especially when compared to investments in other European countries. The need to increase them is also highlighted by a recent report by the European Insurance and Occupational Pensions Authority which classified these risks as potentially destructive for the European insurance sector. "The development of the Space Economy provides a great wealth of new generation data on our planet – says Di Francesco -. The evolution and maturation of artificial intelligence technologies gives the insurance industry the opportunity to exploit this data for the management and transfer of cat nat risks. Particular attention must be paid to climate change, the current situation must stimulate the industry to invest in this direction and fully and effectively rise to its role".