Twister 2017

by Jon Sonnenschein on August 4, 2017

“We got cows!” This memorable line from the movie Twister came when a cow was hurled by a tornado in front of a truck driven by two storm chasers. A tornado can pick up just about anything, and while flying cows may not be on most insurers’ minds, they do need to worry about the impact 200+ mph winds could have on their books of business.

 

In order to protect against cows, and everything else that a tornado can throw your way (cars, trucks, homes), you need to fully understand a tornado. To do that, access to leading data and technology is a must, especially for insurers with portfolios in the Midwest. Remember “Dorothy,” the research device in Twister that was designed to release sensors into the funnel of a tornado to understand its structure from the inside? The goal was to use Dorothy’s data to create a more advanced storm warning system, similar to how we use data and analytics today to track storms as they approach. The only catch? In the movie, they had to put the device in the center of the tornado themselves.

If you’re wondering how to reach a Twister-level understanding of tornadoes to help inform your risk in real life, here’s the good news: you don’t have to build anything yourself. You can access essential insights while a storm is happening, and use the data for future events. The best news? You don’t have to be in the eye of the storm to fully understand it. Insurers may not be physically chasing events, but they are digitally chasing them, with the help of expert wind data and powerful analytics. With the right data, analytics, and technology, you can equip yourself with the information necessary to project the impact and potential damage of a tornado on your portfolio.

Lessons learned from the Joplin tornado

Looking back on the most catastrophic tornadoes, we can use the Joplin Missouri event (2011) as an example of how costly this hazard can be. Joplin resides in “Tornado Alley,” a slew of states in the Midwest highly prone to tornado risk, and was reduced to rubble in the wake of an EF5 multiple-vortex tornado—the seventh deadliest on record in the U.S:

  • Wind speeds of 200 MPH
  • $2.16 billion in claims
  • 8,000+ buildings completely destroyed in minutes
  • Cut a path six miles long, destroying at least one-third of the city

Data and analytics have taken our understanding of tornadoes to new levels, with the Joplin event playing a direct role. The tornado was so severe that it caused the National Weather Service (NWS) to make changes to the way they prepare and respond to disasters. And while the damages were devastating, most insurers acted admirably, especially considering that this was the costliest tornado in U.S. history. John Huff, the director of the Department of Insurance, Financial Institution & Professional Registration, praised the insurance industry in the wake of the event. One resident went as far to say, “Insurance has taken very good care of us.” Her provider even knew to cover the losses her business would suffer from business interruption. “They almost wanted us to feel loved.”

So, how far have we really come?

While the characters in Twister needed to get as close to an event as possible, insurers need  technology, data, and analytics to manage the risk from a comfortable distance, preferably behind their computers. In the time that has passed since Twister came out in 1996, and even since the Joplin event in 2011, our ability to understand and manage tornadoes from the point of underwriting through event response has transformed.

Let’s look at some of the advancements that technology, data, and analytics have provided us:


Underwriting

  • Access to multiple sources of data to inform risk, not just past events
  • Data available and integrated in single platforms and data marts
  • New data providers like HazardHub bringing focused insights, as well as updates to established providers like the NWS and NOAA

Exposure Management

  • Innovative wind and tornado data in conjunction with your own data to visualize accumulations and TIV exposure in case of an event
  • Ability to offer precaution to insurers based on proximity to risk, and adjust your underwriting guidelines to avoid high-risk accumulation areas

Event Response


The evolution of advanced data and analytics tools has given insurers their very own version of Dorothy. Now, they are the storm-trackers. Yet, despite rapid advancements in technology, access to expert data and analytics, and a long-awaited (but highly-anticipated) mindset shift, tornadoes are still an enigma. The average warning time before one hits is only 13 minutes. Insurers need to leverage every piece of information available to get as close as possible to predicting and tracking a tornado’s path of destruction. The only way to do that is to continue to embrace the innovations in advanced analytics that allow for better science, better data, and better event preparedness.

The industry is feeding off of waves of innovation, and it’s clear that we’re trending in the right direction. As better, more accurate data becomes available, and analytics continue to advance, we’ll soon be eclipsing our Twister protagonists in their understanding of this risk.

To see SpatialKey storm-tracking in action, and to learn more about tornadoes and how to protect your portfolio from them, reach out today.

 

Topics: Underwriting, Exposure Management, tornado, claims, insurtech, property and casualty, data and analytics, twister, advanced storm warning, Joplin Missouri, insurers

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