How Radar Satellites are Transforming Flood Surge Event Response for UK Insurers

As an insurer, responding to natural catastrophes is a top priority, but predicting which customers will be affected and how badly can be tricky. 

According to figures published recently by the Association of British Insurers (ABI), adverse weather played a huge part in the rise in home claims. July to December 2023 was one of the wettest periods on record for the UK, while the country has been battered by more named storms than ever before. The combined claims payout from storms Babet, Ciaran, and Debi alone is estimated at £573 million, adding up from approximately 48,700 claims.

Despite significant investment in flood defenses, over 5.5 million properties are still exposed to floods, and climate change is expected to increase this number.

How can the insurance industry maintain its promise to customers as the threat of flood grows?

In this article, we’ll explore how ICEYE’s SAR satellites, the largest privately owned constellation in the world, are helping insurers plan their response to floods. By using this technology, insurers can direct their limited resources to the customers most in need and ensure they can scale up their operations to handle the volume of claims.

Why radar satellites are uniquely positioned for flood surge

As Flood Re points out, hundreds of thousands of homes in the UK could be harder to insure because they’re at high risk of flooding.

Whilst some insurers already use drones, aircraft, and optical satellites, radar satellites are uniquely positioned for flood surge events, as they can see through clouds, rain, and even darkness. This means they can operate 24/7, with the speed and reliability that simply changes the game, especially in countries where the number of cloudy days is high.

Therefore, it is no surprise that insurers are turning to radar satellites to improve their flood claims management. They allow insurers to pinpoint which customers will be affected by a flood and the severity of the impact, even before the customer submits their claim.

Synthetic Aperture Radar (SAR) technology can help emergency teams grasp the full extent of a natural disaster and provide them with the clear picture they need, making a real difference in crisis situations.

Challenges of pre-event operational response planning

Traditional pre-event emergency response planning relies on weather forecasts, media coverage, past claims, and local knowledge. However, these methods are not always reliable or comprehensive, leaving many insurance companies struggling to manage their flood surge response effectively as they struggle “to see the wood for the trees”.

Additionally, each flood surge event is very different, and what happened last time will not necessarily repeat itself. This could be due to land use changes, ground saturation levels, new flood defenses, or changes in customer behaviors and attitudes to risk.

ICEYE Flood Insights in action: Before and after visualization of flooding in Derby, England during Storm Babet in October 2023

Aviva’s 2021 research indicates that despite the increasing frequency of extreme weather events in the UK, many individuals residing in high-risk flood areas still believe their homes are not susceptible to flooding. Specifically, 73% of those surveyed do not consider their property at risk of flooding. In comparison, 67% of respondents residing in high-risk flood areas perceive their homes to be completely safe from flooding.

By leveraging radar satellite data from ICEYE, insurers can identify which customers will be impacted and how severely before many have reported their loss. This data enables insurers to plan and direct their operational and field response to ensure the most severely affected and vulnerable customers receive prioritized support.

Limitations of relying on inbound claims notifications for emergency response 

Typically, insurers direct their field resources in line with the claims notifications received. However, inbound claims notifications are also not always a reliable indication of the severity. The time gap between when the flooding has taken place and when the claim is submitted is highly variable, and most often, the worst impacted customers are not the first to report their loss.

Many things can affect how quickly someone reports a claim after a flood. For example, some customers may have to leave their homes and be unable to return to report the damage. Others may be on vacation or may not realize their property has been flooded. Additionally, some customers may not have the correct information to report the claim to the right insurer or may not have the means to report the claim at all. 

As a result, the most severely impacted customers can take longer to notify their claim than customers with more moderate losses.

If insurance companies rely solely on claims notifications to determine which customers have been impacted by a flood surge event and how badly, they can end up with an incomplete and potentially misleading picture of what’s happening. It will lead to a “first come, first served” approach to sending out help, which means insurers are not prioritizing the most severely impacted customers and their claims.

ICEYE's flood extent and depth visualization in Hilton, Derby, England during Storm Babet in October 2023

Inefficiencies in directing finite resources

This will mean days are lost before the insurer manages the most severe claims. Significantly, these claims will potentially then be even more costly without this proactive early control. For example, deploying industrial drying and cleaning in domestic kitchens in the first 24 hours of flooding can mean a new floor is unnecessary. Another example would be stopping customers from booking their own emergency accommodation, which is more expensive than using the insurers’ provider.

At the other end of the spectrum is the late reported claims challenge, when the customer only becomes aware that they have been flooded months later, such as when the water ingress is not visible. These claims are often contentious and very costly. Insurers sometimes struggle to recover them from their reinsurers when they can’t have evidence of when the water damage occurred.

How radar satellites can help

By directing field resources to the most severely impacted customers, insurers can improve the customer experience and potentially reduce the cost of claims.

If you’re an insurer looking to improve emergency resource management, leveraging radar satellite data can transform your response. With ICEYE’s satellite constellation, the largest privately owned of its type, you can rely on faster and more accurate insights to prioritize support for the most vulnerable customers.

Our next article will explore how insurers use ICEYE’s flood insights to improve claim triage and make claims payments - potentially without “on the ground” inspections and reduce late reported claims. Stay tuned!