AI is improving flood insurance modelling in Canada
Published: October 24, 2018
Updated: October 25, 2018
Author: Luke Jones
CATEGORY: Home Insurance
Artificial intelligence (AI) models and data analytics have helped to open the Canadian residential flood market and is among the reasons insurance companies are now offering this coverage.
“Here is an opportunity that we took to really look at the massive data sets we worked with,” Barbara Bellissimo, senior vice president of Desjardins General Insurance Group, offered while at Tuesday’s Insurance Analytics Canada Summit.
Bellissimo was talking specifically about Desjardins’ own flood solution, which has been available since 2017. Before that, other insurers had introduced residential flood protection, starting with the Co-operators in 2015.
Desjardins offers its flood product as benefit add-ons for standard home insurance policies. Among the protection the solution offers is against loss from water that originates from the rising or overflow of a body of water (river) or a ruptured dam.
The Co-operators agrees and say artificial intelligence has played a significant role in its own flood solutions. Clement Brunet, research and analytics director for The Co-operators, joined Bellissimo during a presentation titled Artificial Intelligence: What you must tell your CEO.
The flood risk is “evaluated by our team of data scientists,” Brunet said, saying analytics tools are used for “every house”.
“If you asked our directors and our executives what they wanted [from AI] they didn’t know,” he said. “They just said [in 2014], ‘It needs to be part of our strategy. We don’t know what it means but let it be there.’”
Insurers agree a lack of flood modelling had prevented them from release residential flood solutions sooner.