What Goes Hand In Hand For Insurers?

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Data analytics in the property and casualty (P&C) insurance sector has become essential for creating products and solutions that can respond to the growing frequency and severity of natural catastrophe (CAT) events in North America. Last week you were reading How Can Organizations Reduce Their Cyber Insurance Premiums? This week we’re bringing you:

Insurers and reinsurers could face claims as high as US$10 billion in a worst-case scenario due to the grounding of planes in Russia, Fitch Ratings said.

More than 500 planes that are financed or owned by non-Russian lessors are stranded in Russia due to sanctions imposed by numerous western countries in response to Russia’s invasion of Ukraine, said a Fitch commentary.

The lessors have hull and liability insurance, as well as specific aviation war cover, and will call on their insurance to be indemnified against expropriation of their planes, Fitch explained. Most aviation policies are underwritten through Lloyd’s of London, and Fitch estimated that 30%–40% of primary insurers’ exposure is ceded to reinsurers.

Industry experts estimate the total insured residual value of the grounded aircraft at US$13 billion, said Fitch. “Hull insurance will typically have aggregate loss limits in place, which means that potential hull insurance claims should be significantly below US$13 billion: we estimate US$5 billion–$6 billion in a realistic scenario,” Fitch added.

“However, we believe total insurance claims could be as high as US$10 billion in a worst-case scenario, which would be by far the largest annual claims in the history of aviation insurance.”

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The COVID-19 pandemic has had a huge impact on global economies over the past two years, and now – with the end somewhat in sight – governments are looking for ways to stimulate their local economies and speed up recovery.

One common strategy deployed by governments worldwide is to increase infrastructure spending. The United States, for example, recently passed the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act), which promises a once-in-a-generation $1 trillion investment into the country’s critical infrastructure. Similar projects are being announced worldwide, with the aim of kick-starting economies after a long COVID slump.

The coronavirus pandemic presented an opportunity for countries to invest in smart technologies, artificial intelligence (AI), and 5G networks, with the idea of cities developing data-driven and connected infrastructure. We saw that come into fruition, with cities worldwide investing in contact tracing wearables and apps, open data platforms, and crowd analytics to fight the pandemic.

Frost & Sullivan said that smart cities will create business opportunities worth $2.46 trillion by 2025, with more than 70% of global smart city spending by 2030 coming from the United States, Western Europe, and China. Post-pandemic, investments are expected to land in smart projects like smart grids, intelligent traffic management, autonomous vehicles, autonomous drones, smart lighting, e-governance services, and data-enabled public safety and security.

Read more in-depth here.


Data analytics in the property and casualty (P&C) insurance sector has become essential for creating products and solutions that can respond to the growing frequency and severity of natural catastrophe (CAT) events in North America.

Kristin Marr, head of analytics at Insurity, has been in the technology space for the last 20 years, helping the industry understand and build out data analytics infrastructure and embedded insurance solutions to help P&C carriers and managing general agents (MGAs) stay agile.

“Data analytics should be portable as customers use many software tools to run their business,” she said. “We help customers make informed decisions in underwriting, claims, and portfolio management to improve profitability and response time.”

One helpful tool for managing CAT events is geospatial analytics, which gathers location-based data such as GPS and satellite imagery, helping insurers in the P&C sector make more informed decisions based on a region’s unique risk landscape. Geospatial risk mapping has evolved rapidly over the past few years to help create the most comprehensive products.

“A great part of what is happening in the geospatial space is predictive analytics,” Marr explained. “Since first coming into the P&C industry, I’ve seen this technology become critical for carriers and MGAs in order to stay competitive.”

There is an insatiable appetite for carriers and MGAs to consume data to make actionable and insightful moves to remain key players in the marketplace, but many are trying to build product platforms that aren’t scalable.

“Onboarding data sources and providers, and building plugins can be very expensive,” Marr said. “The implementation strategy needs to provide flexibility to test out multiple data sources to figure out what works best for a particular business case.

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