The frequency of natural disasters has led insurance companies to look for ways to get a comprehensive and complete assessment of natural hazard risk, and CoreLogic has responded with an innovative solution.
Hazard data is at the foundation of the CoreLogic risk data set. Not only have they developed a system to assess these risks, but they have been able to do it for a range of natural hazards.
“CoreLogic has created risk data for a number of natural hazards, including wildfire, storm surge, flood, flash flood, earthquake, hail, tornado and sinkholes. Some of these are region-specific - for example, wildfire risk data has been created for the Western U.S., and sinkhole data is only for Florida. Floods and earthquakes are nationwide,” explained Dr. Thomas Jeffery, CoreLogic senior hazard scientist.
Leading the way in the development process is one head scientist along with a research and analysis team, who create the models and procedures working in tandem with the product development team, as well as in many instances the clients themselves.
“Working with clients ensures that the products that result from our analysis effectively address the industry's needs. All of our hazard data sets are tested regularly against events when they occur, and in addition, they are all updated on an annual basis. As you can imagine, new input data is being generated as I write this, and all new data will be incorporated into our annual releases,” said Dr. Jeffery in an email.
Above all, CoreLogic believes natural hazard analysis is about education leading to better decisions. Although spatial data has been around for centuries in the form of maps, the real innovation stems from taking the contemporary advanced data analysis processes and making them as specified as possible.
“The real bottom line is that we are able to generate this accurate information at the most granular level, the individual property. The state, county, city and ZIP code levels do nothing but generalize the risk and apply it to a property, which does not reflect the true level of risk posed by the hazard. It is an exciting time to be working on hazard data and analysis and certainly our hope is that the knowledge of where risk is located will help to minimize the effect of future events on both properties and lives,” Jeffery stated.
Dr. Jeffery also outlined advice for brokers and agents:
1. Know where the risk is located. What properties could be affected?
2. Know where the risk is not located. Is this assessment based on macro or micro application?
3. Know the risk concentration of your book of business. How much loss could we experience in each client specific scenario?
