The document summarizes a presentation about how climate change is increasing catastrophic losses for the insurance industry. It discusses how more frequent natural disasters are impacting home insurance profits and driving needs for improved location data. The presentation outlines six steps for insurers to leverage location data and analytics to better manage risks, underwrite policies, and improve marketing, claims, and post-event analysis. This includes using precise location data to predict risks, model portfolios, respond faster to events, and gain insights into customers.

1. A joint presentation by Glenn McGillivray, Managing
Director of the Institute for Catastrophic Loss
Reduction (CMHC) and DMTI Spatial, offered an
insightful perspective on what the insurance industry
can expect in the months and years to come as
they struggle with the impacts of climate change;
and on the role location and visualization can play
in improving overall efficiency, policy development,
customer service and the bottom line.
CATASTROPHIC LOSSES ON THE RISE
McGillivray’s leading presentation addressed the
growing importance of location in real-time risk
management to help businesses face the change in
both the number and severity of natural catastrophic
events in the recent past and projected for the future.
There has been a dramatic increase in natural
catastrophe trends and insured losses in Canada
and globally as a result of hydrological (river and
flash floods, storm surges and landslides) and
meteorological (severe weather, winter and tropical
storms, hail, tornados). In particular, storm losses in
Canada have been earmarked as a key issue for the
insurance industry moving forward.
Since 2009, Canada has experienced losses in
excess of $1 billion annually, with the peak occurring
in 2013 at over $2 billion in insured damage. In fact,
2013 delivered Canada’s costliest and third costliest
insured loss events of all time (the Southern Alberta
flood in June and the GTA flood in early July),
relegating the 1998 ice storm to second place.
It was also the first year to record $2 billion in natural
catastrophes, and the fifth consecutive year of
billion-dollar events. (Previous billion-dollar years
were 1998 due to the ice storm and 2005 with the
August 19 GTA rainstorm).
6 steps to unlocking the power of location:
A guide for insurers in the wake of climate change
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CLIMATE
RELATED
EARTHQUAKES
VOLCANOES
INSURED LOSSES BY PERIL
GEOPHYSICAL
Earthquake, volcanic
eruption
METEOROLOGICAL
Severe weather, winter &
tropical storms, hail, tornado
HYDROLOGICAL
River & flash flood, storm
surge, landslide
CLIMATOLOGICAL
Heatwave, freeze, wildland
fire, drought
DMTI Spatial™

2. 2
HOME INSURANCE: A DECLINING PROFIT CENTRE
One of the more disconcerting issues for the industry is that
homeowner insurance has tended to be more stable than
auto, and therefore more profitable and easy to manage.
Given the events of the past five years, however, homeowner
insurance is performing far worse and can no longer be relied
upon as a profit centre under the current circumstances.
McGillivray cited three causes: more people and property
are at risk due to population density in urban areas, aging
infrastructure and climate change.
A PRESSING NEED FOR BETTER DATA
When combined, these factors are increasing liability and
exposing directors and officers to risk. In addition, fire
insurance has been eclipsed by water damage claims, a
trend that that is having a significant impact on how policies
are quoted and written, and driving a pressing need for
accurate, up-to-date location data.
Larger insurers with in-house resources such as
climatologists, GIS experts, seismologists, etc. have engaged
in a proliferation of modelling over the years to manage this,
yet other smaller organizations have been restricted by a lack
of expert staff resources. Insurers are not the only parties
that can benefit from accurate location-based intelligence.
Regulators also need to know why companies do what they
do, how they do it and what will happen in the future.
McGillivray pointed to a number of challenges in terms of
current location data practices. Canadian government
weather hazard data is not housed in a central repository
and spread over multiple departments; the format and
quality of this is inconsistent; some data has been destroyed
or cut back; and other data is not digitized. There are
also discrepancies in terms of accountability for the data.
Wildfire and flood measurement, for example, is a provincial
responsibility, and can vary considerably in terms of quality
and format. Flood mapping has not been kept up to date
since the 1980s.
DMTI Spatial responded to these data challenges by outlining
six steps to leveraging location that will have a significant
impact within the entire ecosystem of an insurance
organization and on the breadth of the value chain.
6 steps to unlocking the power of location
“An increase in water damage
claims is impacting how policies
are quoted and written, driving
the need for accurate, up-to-
date location data.”
Source: Institute for Catastrophic Loss Reduction
Toronto, Ontario. 2013. $940 million insured damages.
Calgary, Alberta. 2013. $1.7 billion insured damages.
Airdrie, Alberta hailstorm. $450 million insured damages.
DMTI Spatial™

3. 6 steps to unlocking the power of location
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UNDERWRITING AND CLAIMS
The first step involves the underwriter and claims community, where location-based data
can help participants understand the risk associated with the policies they have today, and
visualization capabilities can allow users to quickly grasp the potential of information in
policies for the future. Organizations can use location to build predictive models based on a
better understanding of the customer and the impact that hazards and catastrophic events
may have, translating this insight into policy structure and pricing.
OPERATIONS
The second area is operations, or the ability to leverage location data and visualization to
assimilate disparate pieces of information to support instantaneous decision making, based
on a consistent methodology and approach to managing risk, which can generate productivity
improvements across the underwriter community. According to a Deloitte study, 85 percent
of a corporation’s databases can be logically and appropriately linked using location data.
BACK OFFICE
Step number three involves using location and visualization to improve back office functions,
driving proactivity around portfolio analysis. For example, a claims environment can be mapped
out against an entire portfolio in order to understand potential or emerging trends and make
aggregated decisions around policy writing. This can help the underwriter to better define the
zones that are actually impacted by catastrophic events or other factors, and investigate in
more granular detail before making decisions around levels of restrictions needed to protect
a business portfolio, manage accumulation and improve organizational performance.
PotentialRisks
How can you constantly assess
risk to minimize the impact on
your book of business?
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6 steps to leveraging location
DMTI has worked extensively with CMHC, Genworth and Canada Guaranty Mortgage Insurance to develop
ways to use location information to better manage business.
DMTI Spatial™

4. 6 steps to unlocking the power of location
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MARKETING
The fourth step is marketing. Location can unlock different data sets so that insurers can find
new customers, gain a better understanding of existing and potential customers, determine
how to serve them as efficiently as possible and ultimately, increase profitability.
POST-EVENT ANALYSIS
The fifth area is post-event analysis and activity. DMTI’s post-event analysis and service is
designed to help organizations manage crises, as well as build a history that can be used
to manage risk and examine a portfolio in more detail. In the case of the Calgary floods
for example, DMTI Spatial was able to provide financial institutions with address-by-address
information about properties impacted by the flood and to what degree they were affected.
This enabled insurance organizations to service customers more quickly, and proactively
reach out to customers.
TECHNOLOGY
The final step is technology implementation, including cloud-based architectures and
infrastructures that DMTI has developed to deliver the right information in the right manner
in milliseconds. A second technology benefit is highly scalable infrastructure – last year DMTI
processed over 450 million transactions around address recognition and location information
– and the final consideration is the need for access to Big Data, which DMTI delivers via high
precision geocoding of information.
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Marketing
Profile your best customers, and find your best prospects.
DMTI Spatial™

5. To learn more about how we can help your business,
please contact us at info@dmtispatial.com.
ABOUT DMTI SPATIAL
DMTI Spatial, a member of the Neopost group, is the
Canadian market leader in location based information
and data quality. DMTI Spatial’s award-winning solutions
and high-precision data is relied upon by Global 2000
companies including Google, Apple, top Canadian
financial institutions, telecommunications companies
and government agencies.
We help businesses grow through actionable insights
uncovered by leveraging location to bring together
and analyze a growing world of data. We make
breakthrough products that change the way people
use location. Learn more at www.dmtispatial.com