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Understanding the Science Behind Wind Verification Technology

Improvements in Science and Tools Enable Sophisticated Post Storm Response

Daniel Betten    |    Natural Hazard Risk

Did you know that wind is one of nature’s most difficult hazards to measure? The damage caused from it can potentially go undetected for months, as unlike hail, which can be visually seen and, can often concentrate in the center of severe storms, wind is invisible and depending on geography, can vary widely over small areas. Each year, extreme weather events, including wind, pose a growing threat to property and casualty insurers in the United States, costing billions of dollars in insured losses. Recently, CoreLogic analyzed wind in 2016 that brought wind speeds as high as 101 mph at Kennedy Space Center, Florida during Hurricane Matthew. Severe wind activity like this resulted in considerable collateral damage which led to very long claims cycles.

National Oceanic and Atmospheric Administration (NOAA) and nearby airport observations have often been relied on by insurance claims adjusters to document a claim file. Yet, as neither of these sources represented the wind at or near the location of the Space Center, claim denial or approval decisions were left open to interpretation, leading to likely approval of invalid claims. In addition, poorly understood post-storm exposure leads to significant challenges calibrating storm response, and estimating Incurred but Not Reported (IBNR) reserves.

The ability to understand the specific impact of each storm can be challenging for carriers who are looking to enable a more proactive approach rather than a reactive storm response. Thus, forensic wind verification technologies exist so that carriers can compare detailed storm maps and reports with their books of business. As every storm is unique, this analysis helps carriers to arrive at a better understanding of the impact of each unique storm. With the ability to accurately verify damage and pinpoint affected areas, more targeted response plans can be developed. These plans help to drastically improve customer satisfaction, catastrophe response efficiency, and confidently detect fraudulent claims.

Property and casualty insurance industry is exposed to billions in insured losses every year due to wind. Thus, insurers need to be able to proactively respond to customer inquiries and deploy the appropriate resources with precision. Having a robust wind verification solution makes all the difference.

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