Ali Smedley caught up with McKenzie Intelligence Services’ Rosina Smith and Daniel Grimwood-Bird to talk about the company’s catastrophe response platform, how it has been reporting on the Ukraine conflict and how the company is working within parametric insurance.
What does McKenzie Intelligence Services (MIS) provide to insurers?
RS: MIS provides event response intelligence to the insurance market. We help our customers understand what has happened to their insurance book after an event. Crucially, this is provided before they receive a notification of loss from their insureds. Our core platform, GEO (Global Events Observer), monitors events across the world on a continuous basis.
Rosie and Dan, what are your roles at MIS?
RS: My role is Head of Product at MIS. I am responsible for our core platform, GEO, and my team interacts with clients on a daily basis. We make sure that they are enjoying the product and getting the value they need.
DGB: I am Head of Sales and Marketing at MIS. I help insurers, reinsurers, loss adjusters, and brokers understand what efficiency improvements can be made through using GEO in their catastrophe response and support them in realising those benefits.
How does GEO work?
RS: GEO is constantly analysing various sources to keep track of potential insured events. This can include tracking small disturbances in the ocean before they become hurricanes, for example. Multiple data sources are used, including open source data and data from commercial partners. Through a combination of machine learning and military methods, our intelligence team then turns this data into a representation of an event as it unfolds. GEO applies this directly to our client's property portfolio, telling them which properties are likely to have sustained damage and what the scale of the damage is.
What value does GEO bring to your clients?
DGB: It can be difficult for insurers to get consistent data globally or decide which data source to use for each event in each location. MIS sources, aggregates and creates actionable intelligence using data from commercial satellite providers, fixed-wing aircraft imagery, drone companies and ground sensors to create the best output for each event and location. This exposure output is provided to our clients within 24 hours. We then follow up with a very detailed view of the event. This allows our customers to manage resource requirements for claims and to start making interim or full payments to insureds.
The other benefit of GEO is its accessibility. Some geospatial platforms can be quite intimidating for people without experience as there is a lot of functionality within them, but GEO is designed for the specific needs of people in roles such as exposure management and claims.
RS: GEO also allows our clients to analyse smaller events with the same rigour as huge market loss events. Our clients previously may not have had the resources to do a deep analysis on smaller flood events, for example, but GEO now does this for them automatically.
How does the pricing model for GEO work?
DGB: Clients licence our platform, which gives them access to all data for all current and historic events. In addition to the near real-time event data we provide, clients can request detailed reports on past events. We can answer very specific questions clients may have, such as whether it was wind or water that damaged certain properties.
What war or conflict intelligence does MIS provide?
RS: We have recently expanded our platform to allow clients to automatically view impacts on war on lands, political violence and terrorism books. For conflict, we will cover the cause of damage (for example, strikes and riots) and provide insight into areas currently under threat. At the moment we are reporting on the Ukraine conflict, providing clients with an updated report at least twice a week. This includes confirmation of areas where Russia has made gains, as well as those areas that are under imminent threat. This allows our clients to understand how the conflict is developing and the elements that are pertinent to their particular risk, whether that be physical damage or threats of violence.
What other traditionally non-modelled perils can MIS help with?
RS: We cover traditionally modelled perils, such as wildfire, flood and hurricane, but in territories where they may not be frequently modelled. For emerging risks, we cover a range of events such as the Texas freeze event in 2021, inland wind in specific areas and riots.
MIS’ data is provided in near real-time. How important is this to clients?
DGB: I speak with a lot of Heads of Claims and Heads of Exposure Management who say that they get asked for loss estimates before the event has even finished. At MIS, we aim to provide this information to clients as quickly as possible so they can quickly and accurately manage their internal stakeholders and reserving process. Our near real-time data is also used for managing claim responses and meeting client expectations; they want to recover from a catastrophic event as soon as possible. MIS’ data can help insurers settle claims much faster.
How do different teams within insurers use MIS’ data?
RS: Exposure managers tend to be the first group that use our data and analytics. After an event, they need to know how many policies have been affected and what the insured loss is. These are the questions we attempt to answer on their behalf through our damage data and analysis within 24 hours.
Next is the claims team. They need to estimate how they are going to respond to the event before any claims come in. After FNOL (first notification of loss), claims teams, loss adjusters, and litigators use our service to understand how the claim has unfolded, to ensure claims are paid quickly and accurately and to settle legal disputes.
We are increasingly seeing underwriters use our service. They are using our historic event data to improve renewal and new business strategies. Actuarial teams also use MIS for the reserving process, where money is set aside for future insurance liabilities.
How does MIS work within parametric insurance?
DGB: We are increasingly working with parametric insurance providers. For example, we are the sole trigger provider for parametric MGA Yokahu’s Caribbean hurricane product. Our approach to creating intelligence means we’re able to provide bespoke triggers based on observations which reduces basis risk. We can provide this for individual risks or entire countries. As MIS provides data on multiple perils in near real-time as well as historical data, we can also help with parametric product structuring for a wide range of risks.
To learn more about the parametric insurance market and MIS’ work within this space, you can download our Parametric Insurance in 2022: the 150+ companies to watch report - free to members.
Why does MIS support InsTech as a corporate member?
DGB: We have been partnered with InsTech for a while now. It is a wonderful network of great people and businesses that we’re honoured to be a part of. InsTech events are very informative and are a great place to network.
RS: One of my favourite things about InsTech is the genuine sense of community and desire to collaborate. As part of our membership, we have often had conversations with other insurtechs where we could provide them with value, or they could help us enhance our product.
What companies is MIS looking to connect with?
DGB: We are interested in connecting with insurers, reinsurers, loss adjusters and brokers, who could all benefit from our solution. We are also interested in speaking with potential partners, such as data providers.
We will be at ITC in Vegas on the 14th-16th of September, DIA in Munich on the 28th and 29th of September, and Connected Claims in Chicago on the 2nd-4th of November if anyone wants to find us there. If any interested company wants to have a chat with us, you can also find me at any InsTech event!