In a complex insurance market, insurers must accurately assess risk and respond with efficiency. However, the insurance industry has been plagued by new risks, resulting in increasing losses.
Factors such as climate change have forced insurance companies to change their approach. In California, rising temperatures have resulted in increased wildfires, causing insurers to scale back their home insurance businesses and leaving homeowners uninsured. Florida faces similar challenges, with insurers liquidating and leaving the state due to increased instances of floods and hurricanes. Just recently, category 3 Hurricane Idalia flooded properties and caused upwards of $20 billion in damages.
Insurance plays a vital role in our economy and society, holding trillions of dollars on their balance sheets and providing assurance during disasters. To mitigate the mounting challenges that threaten the industry’s long-term viability, insurance companies should look to 3D analytics to underwrite and operate more effectively.
Cost Reduction and Operational Efficiency for Property Insurers
In 2022, the US property insurance industry experienced a $27 billion net underwriting loss. Increasing input costs, natural disasters, and fraud have resulted in the largest loss in over a decade.
Accurate Risk Assessments in Underwriting
One of the key challenges property insurers faces is accurately assessing risk associated with the probability of loss for various properties and assets during underwriting. Traditional risk assessment methods rely on photographs and physical inspection, which are costly, time-intensive, and prone to human error. By leveraging 3D data, insurance companies can gain a holistic view of the property's structural integrity, surrounding environmental risks, and overall condition. For example, property insurers can LiDAR scan a property and its surrounding area to quantify highly accurate terrain elevation information and update outdated flood inundation maps. 3D scans also allow engineers to easily perform measurements such as square footage or distance to environmental hazards, making risk assessments easier and more accurate.
Safe and Complete Information Gathering After Disasters
When natural disasters or accidents occur, property insurance companies must gather and analyze evidence to ensure their claim payments accurately reflect the associated damage. However, retrieving evidence remains time consuming and at times dangerous. After a catastrophic event (known as a cat event), gathering data to assess property damage is logistically challenging. Sending individuals to physically inspect a property immediately after a flood is oftentimes not an option. Instead, insurance companies can leverage drones to remotely gather 3D evidence, resulting in expedited claims, accelerated recovery for policy holders, and improved safety for all parties involved. To highlight, Farmers Insurance deployed a fleet of unmanned aerial aircraft systems (UAS) with mounted 3D scanners to assess damage after cat events, which improved their ability to detect granular loss on residential roofs and reduced overall response times.
Damage Analysis for Auto Insurers
Measurements During Damage Assessments
Auto insurers lose $29B annually due to errors and omitted information resulting in inaccurate vehicle damage reports and inaccurate claims payouts. To reduce errors, 3D scanning can replace manual processes with proper 3D accident reconstruction. Utilizing mobile LiDAR scanning, accident victims and law enforcement can 3D scan the damaged vehicle within minutes and collect highly accurate measurements. These measurements are the clues needed to reconstruct the crash site, such as analyzing the length of the debris field or amount of vehicle compression. Tools such as color maps can also highlight small dents that are not visible in photographs, reducing costs for claims supplements and re-inspection.
Assessing Liability and Personal Injury
Assessing liability during auto accidents can have a high monetary impact for auto insurers during personal injury claims. 3D models can serve as valuable evidence during litigation in court, providing analytical tools to determine causation. By pairing 3D LiDAR scans with principles of thermodynamics, insurance companies can measure vehicle mass and damage displacement to calculate speed at impact. From this analysis, insurers can assess whether a driver was illegally over the speed limit. When injuries occur, insurance companies can utilize 3D accident reconstruction to perform biomechanical analysis. Measurements from 3D scans are essential inputs into Human Vehicle Environment (HVE) software solutions, allowing engineers to estimate change in vehicle velocity and relative impact speeds. Once these key parameters are dissected, MADYMO, an industry standard software package used to analyze occupant safety, can be used to simulate occupant responses in crashes where the occupant is wearing a seatbelt versus when they are not. Insurers can then understand if a person’s injuries are consistent with accident evidence and adjust claims accordingly.
The Future of 3D in Insurance
The integration of 3D data technology into the insurance industry is beginning to transform the way insurance companies build policies and respond to claims. At Stitch3D, we believe that making 3D data easy to capture, share, and analyze is key to continued adoption.
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