NASA launched a pioneering satellite into orbit on Saturday 31st January 2015 which will provide some benefits for providers of weather linked insurance, as well as further develop our understanding of natural perils.
The Satellite, SMAP, which stands for Soil Moisture Active Passive, will scan the Earth’s soil for moisture information, aiming to provide a comprehensive view of global soil information, including freezing and thawing states, the key purposes of the mission are described as; “One largely is drought, and understanding drought better but also things like flood forecasting and weather forecasting. The information is unprecedented,” explained Bradley Doorn, program manager of NASA’s Water Resources Applied Research Program.
The mission is planned to take a total of three years, costing $916 million, with the SMAP satellite producing complete global soil moisture maps every two – three days.
NASA has revealed that various private sector companies, government agencies, universities and environmental groups have shown a keen interest in utilising the SMAP data, including reinsurance broker Willis Re.
For the insurance market, SMAP has the potential to greatly aid index-based insurance tools, providing a new source of more accurate soil moisture data aiding a better understanding of how to construct drought triggers. This data could to better inform and to construct weather derivatives or other parametric alternative risk products.
As well as the direct data uses, the enhanced insight into perils such as drought and flood can also be of benefit to the wider insurance, reinsurance market and weather risk management market.
SMAP’s combined radar and radiometer instruments will peer into the top 2 inches (5 centimeters) of soil, through clouds and moderate vegetation cover, day and night, to produce the highest-resolution, most accurate soil moisture maps ever obtained from space.
The mission will help improve climate and weather forecasts and allow scientists to monitor droughts and better predict flooding caused by severe rainfall or snowmelt — information that can save lives and property. In addition, since plant growth depends on the amount of water in the soil, SMAP data will allow nations to better forecast crop yields and assist in global famine early-warning systems.
An increased understanding of regional and international drought and flooding occurrences, is sure to enable advanced risk modelling capabilities, resulting in improved underwriting and ultimately more accurate pricing for the protection against such perils.
While NASA states that Willis Re has already shown interest in the data, it’s likely only a matter of time before other insurance, reinsurance and perhaps alternative risk transfer operations begin showing an interest.
According to the dedicated SMAP website, the unprecedented data will improve weather forecasts, monitor droughts, predict floods, assist crop productivity and enhance details on water, energy and carbon cycles.
At a time when climate change is expected to create increasing variation in the frequency and severity of natural perils, the greater understanding the world has of weather related catastrophes becomes vital in the protection of regional and global economies, and the livelihoods millions.
NASA provides some insight into the highly complex operations of the SMAP observatory; “In order to achieve large coverage on the ground the antenna spins at 14.6 revolutions per minute (one revolution every 4 seconds). Over 2 to 3 days (2 days at the poles and 3 days at the equator), the gaps between swaths are filled in and a global map of moisture and frozen land can be prepared. Data taken by SMAP’s two instruments run from pole to pole.”
It’s expected to take 90 days before the science operations start getting to work on SMAP, and the reinsurance and insurance world would be wise to keep a keen eye on the likely invaluable data it produces.