Risk is a ubiquitous, unavoidable fixture of today’s business operating environments. Some factors more easily anticipated, controlled, and managed than others. For example, the risk of property damage due to weather related incidents continues to rise as the world’s population grows and environmental impacts escalate. Moreover, black swan events like the global pandemic make it even more difficult to analyze and predict risk exposure. For these reasons, geospatial technology is critical to providing transparency and visual context for better-informed decision-making and risk forecasting.
In this article, we’ll explore the challenges of climate-related events and how geospatial technologies have evolved to support the modern risk manager.
Challenges of Climate-Related Events
According to the Public Policy Institute of California, one in five Californians are vulnerable to flood risk; this equates to over $580 billion worth of structures in harm’s way. East Coast towns are also setting flood records—according to National Oceanic and Atmospheric Administration (NOAA) officials, East and Gulf coasts are seeing double the amount of high-tide flooding days compared to two decades ago, resulting in flooded shorelines/streets/basements and widespread damage to critical infrastructure.
For risk managers, climate-related events are both daunting and unavoidable, since all organizations are at the whim of nature. However, recent innovations in technology and computing make it possible to dampen the impact of uncontrollable, entropic results of climate-related events. Chiefly, geospatial analysis provides risk managers with data-driven insights for better preparing for the negative consequences of climate-related events.
What Is Geospatial Analysis?
Geospatial analysis involves the collection, manipulation, and visualization of geospatial data to develop accurate forecasting models and visualizations of trends/patterns. This data is acquired primarily from geographic information systems (GIS) and other sources such as GPS and high-resolution satellite imagery. By enriching traditional data with additional, deeper context in regards to time and location, geospatial analytics makes it easier to visually detect patterns and understand complex relationships between events.
Organizations armed with geospatial technologies can readily perform the following tasks for better risk management/mitigation:
- Determine the distance/proximity/relationship between loss events
- Determine the frequency/severity and financial impact of previous incidents for better future planning and preparation
- Integrate weather, geographic, and socio-economic data for developing more actionable graphs, statistics, and thematic maps depicting specific feature sets (i.e., cartograms)
- Create maps depicting changes over time and specific areas impacted by those changes—for example, regional weather-related events and the potential for property damage
- Integrate GPS coordinates, date/time, and more granular identifiers (e.g., property addresses, zip codes) for better accuracy and deeper context
- Create models for detecting historical and real-time shifts in risk exposure, allowing for more comprehensive, proactive enterprise risk management
Benefits of Geospatial Analytics
By revealing relationships, trends, and patterns hidden in traditional datasets, organizations can perform more holistic and effective risk management. Predictive risk analytics and geospatial technologies allow risk managers to leverage new views, perspectives, and pattern recognition capabilities that are difficult or impossible to attain with traditional tools like spreadsheets and databases.
Some of geospatial analytics’ software benefits include the following:
Advance Warnings
As the adage goes, knowing is half the battle. Geospatial analytics allow organizations to easily view and understand how events are unfolding in real-time, in turn enabling them to proactively react to those events. For example, risk managers can view risk information in the context of a visual map triangulated with property values and/or current and historical claims; armed with this data, they can better prepare for, prioritize, and in some cases prevent material losses.
Better Decision-Making
By leveraging geospatial analytics, organizations are endowed with better decision-making capabilities. Location-based data and other geospatial information can help organizations understand why certain locations are more at risk than others (e.g., flood plains, high crime rate zones, areas vulnerable to tidal impacts) and prioritize their risk management efforts accordingly.
Improved Risk Management
Armed with the precision data and insights provided by geospatial analytics, organizations can better optimize the overall management of risk management programs. By understanding which risk factors and assets are relevant in the context of current and emerging threats, firms can better adjust their risk mitigation and transfer strategies on an ongoing basis. Inefficient processes focused on low-priority, low-risk assets can be reduced or eliminated in the face of more pressing risk exposures and daunting threat actors/events.
According to CIO, nearly 80 percent of organizations possess location data. By leveraging the information they already have, firms can paint a more comprehensive picture of their risk landscape—in terms of current known risk exposures, unknown risks, as well risks/threats on the horizon. In short, geospatial technologies and predictive risk analytics allow organizations to factor in the “when,” “what,” and “where” when developing and tuning their risk management programs.
Contact Ventiv Technologies today to learn more about how geospatial technologies can supercharge your organization’s risk management processes.
