The current pandemic is having a dramatic impact on the horticulture industry. We read about growers throwing away crops and flowers because demand has dropped. As this happens, the insurance industry is trying to help their horticulture clients weather the crisis and stay in business through more effective insurance risk assessment.

One example of this effort is the monitoring of greenhouses using earth observation technology and data. Risk assessment is done remotely, eliminating business disruption, reducing risk and costs, and helping horticulturists with business continuity.

In challenging times like today, it becomes even more important to ensure business continuity by minimizing risks and avoiding unforeseen costs. While many risk factors are out of the control of businesses, innovative asset management solutions can provide valuable insights into business operations, helping to identify potential issues that require close monitoring and rapid response.

Earth observation technology on the rise

Currently, the use of innovative earth observation applications to manage assets is on the rise. Earth observation is the science of using space data from satellites to monitor large areas or buildings consistently over time. Earth observation satellites take images of the earth at repeating intervals, generating complex images by capturing all visible colors, as well as infrared and radar signals from the surface.

How can colors, along with infrared and radar signals, be useful to the day-to-day business operations of greenhouse owners? By applying algorithms, these complex images can be turned into detailed information about the performance of different components of a greenhouse.

Data scientists are developing algorithms for monitoring greenhouse walls and floors using radar signals and for monitoring temperature distribution in various greenhouse areas using thermal infrared signals. This means that, without any manual effort, continuous monitoring of the greenhouse is possible using space data. Such monitoring provides greenhouse owners with information about potential damage or potentially low yields caused by a myriad of issues such as sinking soil. Even potentially higher energy bills caused by poor temperature distribution can be predicted.

The capabilities of earth observation technology also has led to the emergence of a new type of insurance risk assessment service for horticulturists. Preventing loss is of interest to both horticulturalists and their insurers. Through subsidence and temperature distribution monitoring from space, insurers can more accurately assess insurance risk and improve underwriting for their horticulture clients.

Designed with a digital and customizable notification feature, this type of monitoring service also is fully scalable and can be evolved to include additional data sources and algorithms based on the newest technology available.

Searching for new insurance data sources

The insurance industry already has been using data for a very long time to assess underwriting risks. It mainly has relied on internal data (e.g., policy and claims data). Based on descriptive analytics, correlations are found between the insured object, the insured and potential claims. For example, the more rooms within a home, the higher the risk of fire.

As the use of data exponentially increases across all sectors, insurers are now searching for new sources of data for assessing risk. How many hospitals and bars, for example, are close to an insured home? This knowledge can be very valuable in assessing risk. According to the CGI Client Global Insights 2019-2020, deriving value from data to improve underwriting and customer evaluation is a top business priority for the insurance industry.

Now earth observation data is becoming an affordable data source that has almost unlimited applications, although it is still rather unknown. There are many satellites in operation today, and most of these generate data that is available for insurers. Some of the data streams are free to use, while others are commercialized. Some use sunlight as an energy source, while others use radar. There is much variety in the types of data streams, and choosing the right streams with the right algorithms is key to achieving desired business goals.

Using earth observation data effectively

The effective use of earth observation data starts with a clear business goal in mind. What problem do you want to solve or which opportunity do you want to seize? This is not always as simple as it seems. We humans tend to stick to our current way of working instead of broadening our view to see the real potential of new opportunities.

When discussing the use of earth observation data for the first time, process optimization often initially comes to mind (e.g., optimizing the claims process with earth observation insight prior to and after an occurrence). However, there are many different use cases, and, from our experience, new ideas often are best generated when forming a multi-disciplinary team.

Based on the CGI Client Global Insights 2019-2020, the top industry trend cited by insurance executives is extending the industry value chain. Insurers are seeking ways to become more relevant to their customers. As insurance increasingly becomes a commodity that is almost solely price driven, generating new ways to add value for customers is key.

CGI developed the Greenhouse Early Warning Service, starting the journey with the objective of creating more value for the customer. To do so, we worked closely with both horticulturists and insurers. This involved understanding each other’s goals and pain points, followed by a proof of concept. Some ideas succeeded, while others failed. The outcome was a service that helps horticulturists improve their operations, reduce their risks and generate higher yields, while helping insurers more effectively assess horticulture insurance risks.

This use of earth observation technology and data can be applied to other areas of the insurance industry as well. This will be the topic of our next blog. In the meantime, feel free to contact us for more information (piet.hein.goossens@cgi.com and ditte.trojaborg@cgi.com).

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About these authors

Piet Hein Goossens

Piet Hein Goossens

Director of Consulting

As an expert and thought leader on optimized insurance rating, CGI’s Piet Hein Goossens works with insurance companies to develop and implement effective rating strategies and solutions. Insurance rating is changing with the speed of the Internet. Usage-based insurance, behavioral-based insurance, Internet of Things, risk-based ...

Ditte Trojaborg

Ditte Trojaborg

Earth Observation Engineer

Ditte Trojaborg is part of CGI’s Space Data Applications team within the CGI Space Unit in the Netherlands. The team focuses on bringing earth observation services to clients, enabling them to implement state-of-the-art digital solutions using space data. Ditte joined the team in 2017 after ...

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