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Canadian climate causes catastrophe claims to climb

When catastrophic weather events and natural disasters damage property, the scale of impact means homeowners can expect to wait for weeks or months just for an assessor to evaluate the damage, let alone begin and complete repairs. And it’s a problem that will only become worse as climate change accelerates and catastrophes become more frequent.

In Canada, insurers have recently had to pay out more in damages – a trend that according to a September 2021 report by the Canadian Institute for Climate Choice, will only get worse as more of the country’s populated areas are threatened by floods. 

In the near future, the report projects that flood damage could cause $1.3 billion in damages per year – with a worse-case projection of $12.4 billion by the end of the century. The problem will affect some of the most concentrated urban areas – for example, in the Vancouver area buildings and homes with a value of over $100 billion are located 3-6 feet from the current sea level. 

Consequently, it predicts that continued increasing rainfall will have devastating consequences: “the number of buildings in the area affected by coastal flooding could rise from 44,000 to 75,000 by the end of the century — while average annual damages for each affected property could rise substantially, from about $600 per year to almost $4,400 annually.”

It’s already happened

Unfortunately, the warning of the report proved prophetic within just a couple of months. In November, Canada had to declare a state of emergency for the flood-devastated BC area. 

The BBC reported that as of 18 November, “17,000 residents were still displaced from their homes, with nearly 10,000 properties facing evacuation orders or alerts.” Estimates of repair were expected to top C$1bn ($790m, £590m).

It’s not just the losses and the tremendous cost of damages that create upheaval in the lives of people who have lost their homes. When catastrophes happen on such a massive scale, the inevitable delays in getting repairs and insurance claims settlements keep those affected from being able to pick up the pieces and rebuild. 

With so many thousands of households affected at one time, getting insurance appraisers out to all of them can take months – and that just gets the claims processes started. That means that on top of possibly being homeless and having to take up temporary residence somewhere at an insurer’s expense, policyholders remain in an extended period of uncertainty, 

Envisioning a better property claims process

Tractable’s AI solutions – today focused on the automotive space – eliminate the bottleneck caused by waiting on in-person appraisals. With AI, we’re able to expedite the process by empowering customers to take their own pictures and videos of damage to get their claim started. 

“We cracked how to assess cars, helping over a million people recover from accidents, and helping recycle cars that couldn’t be repaired,” Alex Dalyac, Tractable CEO, said. “Next up for us is homes.”

Applying the same solution to assessing property damage brings new challenges, as properties involve a greater variety of shapes and sizes than cars. To overcome these, Tractable creates a grid to limit the infinite number of variations on doors, windows, exterior finishes, and other features of a home, so it can apply computer vision to assess home damage. This approach makes the problem solvable and maintains appraisal accuracy in line with industry standards.

With AI, it’s possible to make the damage recovery process 10x faster and potentially reduce the economic burden of natural disasters by 10% as a result of prioritized interventions. Plus, as any solution would be completely scalable, it could work as well for thousands of claims coming in at the same time as it does for a single incident. 

With the frequency of floods and natural disasters only expected to increase, insurers can prepare now to serve their customers in the best way possible when disaster strikes. That means exploring AI-powered solutions to expedite claims and enable families to restore their homes and livelihoods as quickly as possible.

Photo by  Kelly Sikkema

on Unsplash

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