Remote Sensing Data Servers: An Enabling Technology for the development of Applications
3.2 - Insurance Risk Management
For insurance companies, valuable information about their risk portfolio consists in:
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Information about the risk to be insured, in order to define the right and competitive premium level;
- When a sinister occurred, information about its impact, in order to define the reimbursement amount.
Agricultural insurance is a sector which handles huge financial amounts yearly, and where the right information about risk level and climatic events impact is of utmost importance.
As an illustration, lets consider the cost of information related to damages declaration checking, for a typical insurance company operating in the agriculture area (see figure 1)
Figure 1: Typical damage declaration checking process
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When a climatic disaster occurs (such as drought or flood), farmers submit declarations starting the impact on the crop, to be reimbursed;
- The farmers' declarations are controlled in-situ, with the help of expert agronomist, who individually check each declaration. In terms of crop type and area damaged;
- in case of disagreement, the declaration may be reassessed by an additional expertise in the field.
To elaborate the specifications of a Calamities Information Server (CALIS), we analyzed actual operations at agricultural insurance Companies. Taking as example an insurance
Company operating in Greece, the whole operation for a climatic event involves about 400 agronomists, and lasts about 20 to 30 days; It appears clearly that control procedures are costly, and induce delays in the reimbursement process.
An information service is therefore requirement to provide insurance companies and public bodies in charge of agriculture damages with inputs for their decision making processes. The contribution of Remote Sensing can be analyzed at three levels:
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First level : route information, through monitoring of climatic conditions; this provides an overall assessment of the situation, and enables to trigger the second level, when anomalous climatic trend is detected. This information is mainly derived from low resolution Earth Observation data, such as NOAA/AVHRR data, and meteorological data.
- Second level : when abnormal conditions are detected over a specific area, a more refined information is elaborated, to help users assess more precisely the risks at stake.
- Third level : upon a catastrophic event, such as drought or flood, detailed information is derived from high resolution data, such SPOT, LANDSAT and ERS data, in order to provide the basis for damages declarations checking, without systematic field inspection.
Here again technologies have to be selected to bring the above value into the operational routine of insurance analyst, without first requiring from them that they become Remote Sensing, or even information Technology, specialists.
