Weather means business: How weather data empowers insurance providers
For the vast majority of the world’s inhabitants, the weather simply drives their clothing choices and prompts them to seek safety from a coming storm. For businesses, however, weather affects almost everything, from logistics to prices to safety. The insurance industry is particularly weather-focused, having a clear business interest in proactively evaluating the effects of events on policyholders.
Munich Re, one of the world’s largest reinsurers, estimates that weather-related losses in the United States have increased fourfold since 1980. By any measure, the scale of such losses has been immense. The organization also notes that between 1980 and 2011, extreme weather events incurred more than $500 billion in covered losses. For the insurance sector, then, the financial effects of weather-related losses are growing with time. For example, an Insurance Information Institute report revealed that between 1993 and 2012, the insurance industry paid out some $27.8 billion in claims resulting from winter storms, much of it to customers who held homeowner or automobile insurance policies.
Leverage weather data through the power of cognitive computing
In a world in which weather events are becoming ever more costly, weather data—including not only sensor data, geospatial data, mobile data, behavior data and social data, but also a firm’s historical claims data—is an increasingly valuable tool for insurance providers. Accordingly, The Weather Company has created an extremely scalable data platform that incorporates millions of sensors across the globe that supply weather data in real time, with greater than 99 percent accuracy. Coupled with IBM’s global cloud and the advanced cognitive computing capabilities offered by IBM Watson, this weather data platform aims to empower the Internet of Things (IoT) on a scale previously unimaginable, providing a significant competitive advantage to organizations that use it to link their business and sensor data with weather and other pertinent information in real time.
IBM’s acquisition of The Weather Company will bring together IBM’s powerful cognitive and analytics platform and The Weather Company’s dynamic cloud data platform—which powers the fourth most-daily-used mobile app in the United States, and handles 26 billion inquiries to its cloud-based services each day. The Weather Company platform can ingest all sorts of information, created inside or outside the enterprise, at massive speed and scale from 3 billion weather forecast reference points. This platform serves and sources data analytics to and from 40 million mobile phones, and 50,000 flights per day—seven times the volume of the leading search engine.
Make data-driven decisions using the Internet of Things
Today, the increasing probability of extreme weather is forcing insurance companies to adjust their models as they take on more risk. Insurance companies can now leverage IBM and The Weather Company expertise in IoT—using weather data and the industry’s most powerful and scalable data to empower their IoT projects. Weather impacts all business, and triggering IoT devices to react to weather updates will significantly enhance business operations.
IBM Watson cognitive analytics, together with The Weather Company data, offer businesses the ability to instantly analyze options and proactively make data-driven decisions based on the best information available, instead of reacting to circumstances as or after they occur. With IoT-driven weather data, you will never be caught by a storm without accurate knowledge of your risk in advance, and the capability to monitor the impact of the event in real-time.
Though IBM and The Weather Company can’t help you control the weather, we can help you predict, analyze and monitor your risk more efficiently, and more accurately, than ever before.
Learn more about insurance industry-specific solutions based on weather data and the advanced IBM analytics that are delivering data-driven insights and driving growth for insurers around the globe.