de Leeuw, Jan, Vrieling, Anton, Shee, Apurba ORCID: 0000-0002-1836-9637, Atzberger, Clement, Hadgu, Kiros, Biradar, Chandrashekhar, Keah, Humphrey and Turvey, Calum (2014) The potential and uptake of remote sensing in insurance: A review. Remote Sensing, 6 (11). pp. 10888-10912. ISSN 2072-4292 (Print), 2072-4292) (Online) (doi:https://doi.org/10.3390/rs61110888)

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Abstract

Global insurance markets are vast and diverse, and may offer many opportunities for remote sensing. To date, however, few operational applications of remote sensing for insurance exist. Papers claiming potential application of remote sensing typically stress the technical possibilities, without considering its contribution to customer value for the insured or to the profitability of the insurance industry. Based on a systematic search of available literature, this review investigates the potential and actual support of remote sensing to the insurance industry. The review reveals that research on remote sensing in classical claim-based insurance described in the literature revolve around crop damage and flood and fire risk assessment. Surprisingly, the use of remote sensing in claim-based insurance appears to be instigated by government rather than the insurance industry. In contrast, insurance companies are offering various index insurance products that are based on remote sensing. For example, remotely sensed index insurance for rangelands and livestock are operational, while various applications in crop index insurance are being considered or under development. The paper discusses these differences and concludes that there is particular scope for application of remote sensing by the insurance industry in index insurance because (1) indices can be constructed that correlate well with what is insured; (2) these indices can be delivered at low cost; and (3) it opens up new markets that are not served by claim-based insurance. The paper finally suggests that limited adoption of remote sensing in insurance results from a lack of mutual understanding and calls for greater cooperation between the insurance industry and the remote sensing community.

Item Type:	Article
Additional Information:	© 2014 by the authors; licensee MDPI, Basel, Switzerland. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
Uncontrolled Keywords:	Insurance; Remote sensing; Index insurance; Agriculture; Flood risk management
Subjects:	S Agriculture > S Agriculture (General)
Faculty / School / Research Centre / Research Group:	Faculty of Engineering & Science Faculty of Engineering & Science > Natural Resources Institute Faculty of Engineering & Science > Natural Resources Institute > Development Studies Research Group Faculty of Engineering & Science > Natural Resources Institute > Food & Markets Department
Last Modified:	26 Apr 2020 16:46
URI:	http://gala.gre.ac.uk/id/eprint/17674

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