The global insurance market has suffered a downturn of -3% in 2020 due to the COVID-19, but those losses are expected to be recovered by the end of 2021. This recovery is partially explained by the pandemic itself which has raised individual and commercial awareness of these risks and therefore stimulating demand in the short to mid-term for both life and non-life insurance.
COVID-19 is having a significant impact on the insurance value chain by accelerating its digitalisation leading to the sector adapting their distribution models. These developments are on one hand also driven by societal factors such as consumers demand for efficiency and flexibility in claims management and on the other hand environmental factors such as risks related to climate change and increasing natural disasters.
The insurance sector is already somewhat familiar with using space data in developing their policies. Big insurers like Generali, Swiss RE and Allianz have strong internal capabilities in the exploitation of satellite imagery for improving their underwriting and risk modelling. Space data can support in analysing, monitoring, and forecasting natural disasters and extreme weather events which can help the insurance industry to anticipate and provide better potential damage assessments and fasten access to compensation.
Index-based insurance policies are especially expected to increase in demand (e.g. field of agriculture) as they are more customised towards the policy holder and provide transparency and efficiency of pay-outs. Space data can support here (e.g. climate, extreme weather related) in defining and analysing the parameters of such policies. Other examples of space added value are environmental/air quality data for the health and life insurance, GNSS enabled trackers fitted to cars for providing more cost-effective usage-based insurance policies or providing connectivity for enabling insurance services in areas with insufficient terrestrial coverage.
In times of increased awareness for climate change and consumers demand for digitalisation, the insurance sector can now more than ever benefit from space enabled services and applications. The ESA’s experience in the past through partnerships with insurance providers like AXA and the managing of insurance related projects such as e-Drift and CASSIA gives it the needed expertise to support this sector in its transition.