The modern insurance industry is changing rapidly. In the last few years, a new group of companies called insurtechs have been shaking up how insurance is bought and sold. The industry has always been slow to change, but now digital tools make it easier for customers to get quotes from different providers in minutes.
As the insurance sector goes through a transformation, companies are looking for new technologies and innovative approaches to manage risks and determine prices. The satellite images of the Earth's surface provide information for all levels of business, from farmers to governments - so they can better manage their risks.
In this article, we'll show you where space data comes into play, as well as some other factors that can help insurers compete more effectively in the future.
The Copernicus program
The European Space Agency (ESA) is making it easier for companies to use space data. For example, the Copernicus program provides free and easy access to a broad range of data sets. They can get data from the atmosphere and marine-related changes to land or climate change-related aspects of the environment. Early notifications for security and disasters are also covered.
The ESA is also working with insurance companies on new products that can be made possible by space data – for example, monitoring crop growth or predicting floods from rainfall measurements taken across the globe. According to a recent interview with General Raymond, Chief of the U.S. Space Force, he said: "There is an explosion (I know, not a good term to use relating to space) of commercial activity occurring that will generate a four trillion-dollar space economy in the coming years."
The Lightning Imaging Sensor (LIS)
On the other side of the Atlantic Ocean, NASA is also helping to improve the insurtech sector. The U.S. agency provides free data sets for commercial use, which can be used by insurers and government agencies alike – including near real-time environmental monitoring information from space.
For example, NASA developed an algorithm that interprets large amounts of data from the Lightning Imaging Sensor (LIS) on its Tropical Rainfall Measuring Mission satellite as far back as 2014. The system can predict lightning up to six hours before it strikes, giving time for companies to take precautions or issue warnings if necessary.
International Partnership Programme (IPP)
Back in the United Kingdom, the U.K. Space Agency is running a £30 million (GBP) initiative called the International Partnership Programme (IPP). This program aims to support foreign companies who want to access the British space industry. It provides a platform for collaboration between countries as well as opportunities for education and training – all with an eye towards growing the U.K.'s impact on global markets, including insurance.
According to a recent study by the U.K. Space Agency, "While they remain nascent, several use cases for space technology in the finance sector are being tested, while others are already deployed." Many experts forecast there will be significant growth in the area of space data for insurance over time as new applications are developed over time.
The insurance industry has always collected information about clients to help determine premiums and set prices accordingly, but now insurers have more sources than ever before. Satellite data is just one of the many tools available for them today - and it's revolutionising the way they monitor portfolios and manage risks.