Innovations in the use of data facilitating insurance as a resilience mechanism for coastal flood risk

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dc.contributor.author Rumson, Alexander G.
dc.contributor.author Hallett, Stephen H.
dc.date.accessioned 2019-01-31T19:35:52Z
dc.date.available 2019-01-31T19:35:52Z
dc.date.issued 2019-01-14
dc.identifier.citation Alexander G. Rumson and Stephen H. Hallett. Innovations in the use of data facilitating insurance as a resilience mechanism for coastal flood risk. Science of the Total Environment, Volume 661, 15 April 2019, Pages 598-612 en_UK
dc.identifier.issn 0048-9697
dc.identifier.uri https://doi.org/10.1016/j.scitotenv.2019.01.114
dc.identifier.uri http://dspace.lib.cranfield.ac.uk/handle/1826/13872
dc.description.abstract Insurance plays a crucial role in human efforts to adapt to environmental hazards. Effective insurance can serve as both a measure to distribute, and a method to communicate risk. In order for insurance to fulfil these roles successfully, policy pricing and cover choices must be risk-based and founded on accurate information. This is reliant on a robust evidence base forming the foundation of policy choices. This paper focuses on the evidence available to insurers and emergent innovation in the use of data. The main risk considered is coastal flooding, for which the insurance sector offers an option for potential adaptation, capable of increasing resilience. However, inadequate supply and analysis of data have been highlighted as factors preventing insurance from fulfilling this role. Research was undertaken to evaluate how data are currently, and could potentially, be used within risk evaluations for the insurance industry. This comprised of 50 interviews with those working and associated with the London insurance market. The research reveals new opportunities, which could facilitate improvements in risk-reflective pricing of policies. These relate to a new generation of data collection techniques and analytics, such as those associated with satellite-derived data, IoT (Internet of Things) sensors, cloud computing, and Big Data solutions. Such technologies present opportunities to reduce moral hazard through basing predictions and pricing of risk on large empirical datasets. The value of insurers' claims data is also revealed, and is shown to have the potential to refine, calibrate, and validate models and methods. The adoption of such data-driven techniques could enable insurers to re-evaluate risk ratings, and in some instances, extend coverage to locations and developments, previously rated as too high a risk to insure. Conversely, other areas may be revealed more vulnerable, which could generate negative impacts for residents in these regions, such as increased premiums. However, the enhanced risk awareness generated, by new technology, data and data analytics, could positively alter future planning, development and investment decisions. en_UK
dc.language.iso en en_UK
dc.publisher Elsevier en_UK
dc.rights Attribution 4.0 International *
dc.rights.uri http://creativecommons.org/licenses/by/4.0/ *
dc.subject Risk Analytics en_UK
dc.subject Adaptation en_UK
dc.subject Remote Sensing en_UK
dc.subject Big Data en_UK
dc.title Innovations in the use of data facilitating insurance as a resilience mechanism for coastal flood risk en_UK
dc.type Article en_UK


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