Extreme weather caused by climate change is leading to increasing payouts for insurers, prompting a need for more precise risk prediction models. 7Analytics, a flood intelligence company, has raised €4 million in funding to enhance its AI-led flood and landslide prediction models, aiming to provide insurance coverage in high-risk areas. With growing concerns about compounding risks, there is a demand for specialized focus on different areas of risk, rather than individual hazards.
The impact of flooding on economies is evident, with the US experiencing extreme weather events costing at least $1 billion every three weeks, and the UK’s Nationwide Building Society no longer offering mortgages in high flooding risk areas. UK property insurers paid a record £2.55 billion in home insurance claims in 2023, highlighting the challenges faced by the industry. 7Analytics aims to provide insurers with accurate risk data to assess the specific risk of each property, enabling better decision-making and coverage in high-risk areas.
Global insured losses from natural catastrophes exceeded $100 billion in 2023, with severe storms and urban floods driving the losses. As climate change intensifies, insured losses are expected to double over the next ten years, leading to challenges in setting premiums and providing adequate cover. The rise in extreme weather events poses a threat to the insurance industry, with insurers struggling to keep up with the evolving risk landscape.
Severe thunderstorms have become one of the major loss-making perils due to urbanization and economic growth, leading to increased insurance payouts. Flood risk analysis options, such as ICEYE’s satellite-based monitoring services, offer four days of advance flood impact forecast, enabling insurers to deploy resources to prevent and mitigate flood damage. There is a growing need for accurate risk prediction data for various natural disasters, driving demand for solutions like 7Analytics’s InzureFlood product, which helps reduce exposure to insurance losses by pinpointing assets at risk of flooding before it occurs.
The emphasis on local-specific flood risk understanding is crucial in mitigating the impact of extreme weather events. Products like 7Analytics’s InzureFlood provide detailed risk analysis at a building level, enabling insurers to identify lower-risk clients in high-risk areas and offer flood insurance to more people. With over forty clients, 7Analytics plans to expand its offerings in the US and globally to meet the increasing demand for better modelling tools in the face of climate change-induced extreme weather events. The insurance industry is recognizing the need for enhanced risk prediction models to navigate the challenges posed by climate change and extreme weather.
