REACT: Taking risk and data modelling to the stratosphere
Risk assessment has officially gone stratospheric, with the introduction of REACT - a new insurtech platform that uses Earth Observation technology, data analytics, machine learning and geolocation, to map potential hotspots and provide vital risk scores.
Developed by the Irish space technology company, Skytek, REACT is as dynamic as it sounds, having been created by a team of astrophysicists who work on projects for NASA and SpaceX.
According to reports, the satellite-powered suite of tools draw on deep datasets and is paired with easy-to-use dashboards that allow underwriters to prepare for the future by looking simultaneously at the present and past.
The platform combines geolocation data, satellite imagery, AI and historical data so that underwriters and brokers can swiftly observe any region of the world and assess the risk factors. Risk scores can be calculated according to chosen underwriting parameters, allowing for automated portfolios and a risk dashboard that provides foresight of accumulations and a benchmark of risk appetite.
Space-age risk assessment for insurers
Skytek chief executive Dr. Sarah Bourke, explains, “REACT is uniquely powerful, putting decision-ready data at the fingertips of insurers, reinsurers and brokers when they need it, but it is also familiar and easy to use, and as a cloud-based suite with fantastic integration API’s it doesn't need to be updated or reinstalled, and can seamlessly integrate into existing technology and modeling software."
The platform provides a 360-view of business from live asset location tracking alongside Earth Observation satellite imagery, along with essential background information on static and moving assets, for marine, aerospace, energy, offshore, property, and infrastructure.
Essentially, says Bourke, REACT is a state-of-the-art technology platform providing real-time and predictive insights to supplement data modelling with ground truth facts. It has been developed to enhance the underwriting process, enabling insurers and reinsurers to manage live CAT events and future-proof organisations with ESG (Environmental Social & Governance) scoring and compliance.
Taking Earth Observation to a new level
REACT can be used across all insurance classes and with its revolutionary ability to tailor risk selection and to support underwriting decision-making, REACT is ushering the fastest possible change, but doing it with ultra-rapid evolution rather than costly and disruptive revolution.
With the growing threat of climate change making extreme weather more a frequent occurrence, insurers can stay ahead of risk by using REACT to not only track asset location but examine behaviour, such as clustering in high danger zones, and remove or adjust cover in light of risky behaviour.
The platform's combination of earth observation imagery and AIS data, and access to key underlying information including utilisation, maintenance, registry, ownership, and historical data, provides a powerful set of tools for protecting insurers from foreseeable losses.
Tracking climatic changes and risk
In terms of risk assessment for weather crisis, the past two years have been turbulent, from the wildfires in Australia and California to the recent floods - again in Australia and more unusually across Europe. But Earth Observation is useful for more than disastrous weather events.
For example, REACT was the first platform to provide vital images of the Port of Beirut explosion, and also ran imagery on the recent Suez Canal disaster when the Ever Given container ship ran aground.
While no software suite can prevent suchevents from occurring, REACT is unique in its ability to observe locations and facilitate pre-and post-event using machine learning to analyse earth observation image comparisons. It enables insurers to see the true extent of damage and understand the timeline of events in the run-up. This pre-and post-event functionality can drive accurate and rapid loss assessment and identify breaches of coverage.
With Environmental, Social, and Governance (ESG) issues topping both the corporate and public agendas, REACT allows users to maintain and adapt with compliance needs at a high level to understand the impact of events. These range from potential or immediate environmental damage to on the ground insights including excess fuel use and emissions following potential rerouting.
A game-changer in terms of risk assessment
“REACT is a true game-changer. The perfect solution where technology supports and enhances the role of the insurer to add value, identify opportunities, and ultimately improve profitability and growth,” says Christian Silies, Head of Marine, Energy, Composite at Aon Reinsurance Solutions at Aon.
He points out that REACT allows insurers and brokers to accurately manage underwriting and claims as well as expand their business by new products and differentiate themselves from competitors with value-added services and insights.
Bourke, explains, “With historic and predictive data REACT is the modern scalable solution, providing insurers with the hindsight, full sight, and foresight to deliver smarter, faster decisions.
"In this new digital era technology will have a major influence on the future success of insurance however this is not about drastic disruption and change this is about a natural evolution of continual improvement where technology supports and enhances decision making not replaces the value and insight of industry professionals."
She adds, "The new era of the ‘digital insurer’ is already upon us; it's now down to industry leaders and early adopters to create real differentiation and in turn, improve profit and growth”
Anti-fraud technology firm FRISS raises US$65mn in funding
FRISS, a technology firm specialising in anti-insurance fraud and provider of AI-focused insurance fraud prevention products, has today announced it has raised US$65mn in Series B funding to expand its business and develop new products. Led by private equity firm Accel-KKR, the round was endorsed by investor Aquiline and advised by FT partners.
The company, active in more than 40 countries worldwide, will aim to save insurers around US$2bn in capital obtained from fraudulent activity this year alone. “We’ve been around for 15 years and completed over 200 implementations,” said Jeroen Morrenhof, FRISS CEO and co-founder.
“FRISS is ready to scale exponentially through our Series B, taking our mission of accelerating safe digital transformation throughout the policy lifecycle to the next level,” Morrenhof added.
How does FRISS’ anti-fraud technology work?
The technology used by FRISS to detect fraudulent activity integrates artificial intelligence (AI) to help insurers reduce losses and increase operational efficiency. The company said it offers real-time end-to-end P/C insurance fraud analytics products and services covering the complete lifecycle of the policy, including automated underwriting risk assessment to fraud detection during claims and comprehensive case management.
Alerts are displayed via integrations with core systems such as Guidewire, Duck Creek, Sapiens, and Keylane. In addition, the system can pull additional information from various available data points to create a “holistic view of the risks attached to each policy request, renewal, or claim,” the company said.
Insurance fraud and ghost broking
Leading UK car insurance firm Aviva found more than 12,000 fraudulent claims were made in 2020, totalling more than £113mn. This amounts to 33 claims per day or one every hour. The company expects insurance fraud to increase due to the financial strain brought about by the coronavirus pandemic. It also found that more than 19,000 claims were under investigation for fraud whilst fraudulent policy applications and Ghost Broking grew by 34%. Ghost broking is a type of insurance fraud predominantly affecting the car insurance sector. It involves a fraudster or scammer targeting higher-risk individuals such as newly qualified drivers and elderly people, pretending to be either an insurer or someone who can purchase insurance on a driver’s behalf.
They tend to advertise their services on social media, university campuses, pubs, and students forums, promising cheaper insurance. After claiming to have purchased insurance successfully, they then cancel the insurance and leave the victim with no cover. They may also forge insurance documents or falisfy a driver’s details, invalidating the policy.