Financial PlanningShort-termTechnology

Technology: mapping the new frontier in underwriting

Thermography is probably best known in South Africa for having helped track down Panjo, the tiger that went AWOL from his Mpumalanga home in July last year. When not seeking errant tigers, this technology is now being used for the early detection of fault conditions in equipment by visualizing defects through heat imaging.

Thermal image scanning is just one of the technologies that are going to be shaping the underwriting landscape in future. Thermal images are invaluable in many different areas: for instance, thermography can be used to check electrical reticulation (helping avoid fires and breakdowns caused by electrical failure); defects in civil structures (roads, buildings and bridges) can be detected; liquid levels in tanks can be checked; and environmental events (like underground fires, water pollution and sinkholes) can be identified and monitored, to name but a few uses. Effectively, this means that thermal images can identify areas experiencing abnormal levels of stress before they break, burn, fail, disrupt production lines or leak.

‘Behavioural underwriting’ is already being applied quite widely in the motor underwriting sector where, for example, female drivers get better rates for being considered ‘safer’ drivers. In future, technology will make it possible to underwrite for specific individuals rather than groups. For instance, consider the fact that vehicle tracking companies access millions of data points as a matter of course every day. By using these to measure gravity (at the front, back, left and right hand sides, as well as up and down), an individual’s driving performance and habits can be precisely determined. This means that motor underwriting will no longer predominantly be about factors like the driver’s age, sex, accident history and type of car. Instead, insurers will now be able to compile a very detailed behavioural risk per individual.

This would also have significant benefits for companies from a risk management point of view. Fleet managers would be able accurately to determine individual drivers’ risks, down to being able to measure emissions to pinpoint drivers that are not driving properly.

Technology that will be used within the new toll road system could also impact on underwriting. For instance, there is talk that toll companies’ monitoring vehicles will be on the roads, randomly capturing images of passing vehicles’ number plates and matching vehicles’ make and colour to the registration, which would immediately identify fraudulent number plates on stolen vehicles. There is even speculation about monitoring the average driving time between toll gates, which would determine driving speed.

Fleet managers are already making use of technology that employs a camera positioned in truck cabs to capture images of various points, like the front and back of the truck. The camera continually refreshes and, as soon as there is an incident, like jerking or sudden braking, it starts recording onto a hard drive and downloads the images to a control room. Not only does this system effectively monitor driver performance, it also helps avoid 3rd party liability disputes. The camera also makes a significant contribution to road safety: detecting if the driver falls asleep and automatically calling his cell phone; and monitoring the lines on road and vibrating the steering if the truck crosses the line.

There is no doubt that, in future, technology will increasingly be embraced by the broader insurance industry and particularly the cell captive industry, which has at the heart of its business model the identification and management of risk.

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