ICEYE & McKenzie to deliver portfolio-level property flood loss estimates

ICEYE, a provider of satellite data for decision-making and analysis, and McKenzie Intelligence Services (MIS), a geospatial information, insurance and reinsurance intelligence provider, have teamed up to deliver portfolio-level property loss estimates for flood events to the Lloyd’s market.

ICEYE is going to deliver the flood analysis to augment McKenzie’s MIS Global Events Observer (GEO) platform so that insights on major flood market loss events can be provided to insurance and reinsurance underwriters in the Lloyd’s market.

ICEYE will feed active flood hazard data to MIS’ systems, before, during and after large-scale flood events.

It will include flood depth information at the individual building level across the flooded areas, bringing together satellite imagery generated by synthetic-aperture radar (SAR) as well as flood measurements from auxiliary sources, including river and tidal gauges, digital elevation models, ground sensors and watershed maps.

In this way a property level picture of flood extent and impacts can be derived, which will provide vital information to underwriters, to help them understand the potential portfolio-level impacts of any flood event.

ICEYE’s service is independently verifiable, transparent, and offers a consistent way to derive an accurate flood depth measurement in near real-time for any location anywhere in the world, with this service available to insurance and reinsurance market interests globally.

Most interesting though, for our readership, is how such services can be used to inform portfolio managers on the potential impacts and losses from major flooding events, as well as how they could be used to construct parametric triggers, focused on specific high-risk flood zones, against which insurance or reinsurance protection could be purchased (or sold) and activated when flood depths rise above certain levels, in certain locations.

MIS’ offering uses multiple data sources, including satellite, drone, and CCTV images, and through its GEO platform provides the insurance industry with observation-based portfolio and individual property loss estimates, ostensibly for claims and reporting purposes.

The market needs these kinds of services to aid in managing portfolios of risk, but also in constructing protection for them and so ICEYE’s flood analytics, combined with portfolio or industry exposure type insights, could make for an interesting proposition, in terms of parametric trigger construction.

“We are delighted to be announcing our agreement with McKenzie Intelligence Services,” Lisa Wardlaw, Global Head of Insurance Solutions at ICEYE explained. “This partnership brings together two Lloyd’s Lab graduates, combining best-in-class observation analysis from ICEYE with the innovative ‘decisions-as-a-service’ platform GEO from MIS. By supplying ICEYE’s proprietary flood hazard data, we can enhance the services that MIS is delivering under its two-year partnership with Lloyd’s and deliver world-class satellite imagery and data to the market.”

“We are very pleased to be joining forces with ICEYE on providing flood loss analysis to the Lloyd’s market,” added Forbes McKenzie, CEO of MIS. “Through our participation in the Future at Lloyd’s programme over the past two years, we have gained unprecedented insights into how our technology can add additional value to the whole insurance value chain. This new partnership will add further value cases for Lloyd’s syndicates and deepen our understanding of flood risks. We look forward to working with ICEYE to better serve the Lloyd’s marketplace.”

Building level flood analysis and decision-making is relevant far more widely than just in the Lloyd’s market, where this announcement was focused.

Granular insights into developing flood events, using multiple data sources and satellite imagery, can both prepare underwriting companies and portfolio managers for losses and provide valuable insights for risk pricing in the future as well.

Information on how floods develop, as well as which areas flood fastest and deepest, can provide risk rating insights that inform underwriting decisions.

Then, at the portfolio level, it would be possible to develop and construct flood depth and extent related parametric triggers, which would utilise a service like this as reporting and calculation agent, to deliver real-time triggering of flood insurance, or at the portfolio level reinsurance.

Both interesting opportunities for the companies involved, but more importantly the market as it looks to better cover major flood events.