How insurers can gain a Twister-like understanding of tornado risk this season

by Jen Smoldt on May 21, 2018

tornado risk is real this season

At a glance:

  • A slew of tornadoes hit the Northeast this season causing massive damage. While insured losses are still being tallied, the twisters spun off from a chain of severe convective storms (SCS) that brought with them straight-line wind, hail, heavy rain, and flooding from Florida to New York.
  • Annual insured losses from severe convective storms are expected to approach $25 billion—that’s higher than hurricane and earthquake combined, according to new research from Karen Clark & Company.
Read on to learn what insurers can do to better assess and protect themselves, and insureds, from tornado risk this season.

In a span of two hours, four tornadoes recently hit the community of Hudson Valley, New York. This cluster tornado event is reminiscent of the movie Twister. While tornadoes make for action-packed theatrical entertainment, in real-life they are...Just. Plain. Scary. But, why are they so scary? Because they’re both massively destructive and unpredictable. A double-whammy in the world of risk. Tornadoes garner wonder because they’re erratic. And, despite advancements in technology and science, they’re still an enigma. In fact, the average warning time before one hits is only 13 minutes. What can insurers do to arm themselves, and their insureds, against this catastrophic risk?

Dorothy helps understand tornado risk

In the movie Twister, “Dorothy” was a device launched inside a tornado’s vortex and used wireless sensors to gain valuable data.

Your very own Dorothy: SpatialKey

Remember “Dorothy” from Twister? Dorothy was a device created to collect valuable weather data from inside a tornado. And, while Dorothy was fictional she was inspired by an actual device TOtable Tornado Observatory (TOTO), named after Toto from the movie The Wizard of Oz. In real-life the TOTO device was created by actual NOAA scientists, and served as the inspiration for Dorothy in the movie Twister. Today, scientists continue to put instruments into the path of tornadoes to collect valuable data. In fact VORTEX2, a joint effort of NOAA and National Science Foundation, was one of the most ambitious studies conducted in recent history to understand and forecast tornadoes better.

But, while science is making strides, insurers still need to leverage every piece of information available to get as close as possible to predicting and tracking a tornado’s path of destruction. Fortunately, they don’t need to get inside a tornado to that. Innovations in weather data exist right now, such as tornado data from HazardHub, WeatherGuidance, and NOAA—all accessible within SpatialKey.

Understand tornado risk across your enterprise from underwriting to claims and exposure management:

Underwriting:

  • Access next-generation data from HazardHub
  • Integrate this data at the point of quote (POQ) via a single platform
  • Collaborate across departments and ensure shared understanding of data through a single source

Exposure Management:

  • Use storm data (along with your own data) to visualize accumulations and understand actual exposed limit
  • Adjust your underwriting guidelines to avoid high-risk accumulation areas

Claims:

  • Provide advanced outreach to policyholders and track the storm as it’s happening with tornado data from WeatherGuidance and NOAA
  • Know where tornado claims are most likely to occur and where to allocate resources to handle larger claims volumes
  • Improve the speed of claims processing and settlement for increased customer satisfaction and loyalty

With the right natural hazard data, analytics, and technology, you can equip yourself with the information necessary to project a tornado’s impact and potential losses on your portfolio. To see SpatialKey in action, and learn more about how to protect your portfolio from tornado risk, reach out today.

LEARN MORE ABOUT TORNADO RISK

Topics: weather data, Storm Tracking, twister, Severe Storms

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