Tens of thousands of homes could see flood insurance premium drops of 50% next year, under a major expansion of world-leading technology.
Dubbed First Floor Elevation (FFE), the Geoscape Australia technology is powered by AI and uses ground-view imagery to inform insurers and banks whether an individual building is at risk from flooding.
Aon, the world’s largest reinsurance broker, and Geoscape plan to roll out the technology.
The companies say FFE can accurately measure a property’s first floor elevation to better understand whether it will be inundated during a catastrophic flood.
They add that this is the first time that this will have been on offer in Australia, at this level of accuracy and scale.
Aon is embedding it across its risk advisory and data products, which reach more than 90% of Australia’s insurance sector.
Last week, Aon and Geoscape showcased its potential at summits in Sydney, Brisbane and Melbourne, bringing together senior representatives from across the insurance industry, including QBE, IAG, Suncorp, Hollard and Allianz, as well as the four major banks.
Initial modelling by Aon shows 13% of properties in flood zones could see reductions of 50% or more to the flood-specific portion of the premium, when the height of their first occupied floor is considered.
“At a time when extreme weather events and inflationary pressures are pushing up insurance premiums and putting adequate insurance cover beyond the reach of many Australians, this technology could really transform flood risk assessment for the sector,” said Aon Head of Risk Advisory in Asia-Pacific, James Knight.
“Having a more realistic understanding of flood risk for individual properties means insurers can price with greater confidence and, for those with raised floor levels, help keep flood cover more affordable and accessible.”
Geoscape CEO, Dean Capobianco, said FFE allows insurers to assess the vulnerability of individual buildings, rather than relying on broad assumptions about an address or flood zone.
“Two homes in the same flood zone can face very different risks. This technology replaces broad assumptions with a more precise view of each individual building,” Capobianco said.
“This is world-leading technology solving an Australian problem, with the potential to support more affordable premiums and more accessible insurance.”
