Insurance companies frequently do not find out about damage events until the narrow window during which measures could have been taken to minimize the loss has closed. That also applies to Munich Re, the world’s largest reinsurance company with a workforce of over 40,000.
To be able to recognize relevant damage events at an earlier stage and save critical time in processing cases, Munich Re has worked with Empolis to develop the “Early Loss Detection System”, ELD for short, which collects business-relevant information from numerous news sources on the Internet and analyzes them as quickly as possible.
For this system, Empolis implemented a Big Data solution that continuously monitors approx. 16,000 global news sources and examines millions of news items virtually in real time for indications of damage events that may be relevant to reinsurance. Such sources include news feeds from online media and social media sources as well as specialized data sources, particularly sources maintained by government agencies.
News are classified, analyzed at regular intervals, and evaluated on the basis of a specific knowledge model. Using semantic methods, the news are scrutinized for relevant entities, such as damaged objects, the type, location, and cause of the described damage, the mentioned financial losses, as well as details about any bodily injuries. On the basis of the resulting annotations, the publicly available information about a damage event can be presented to the loss adjusters in a structured manner, complemented by a comparison with internal risk information.
Through the analysis of all available news, Early Loss Detection allows prompt, virtually real-time intervention with respect to current damage events, the continuous monitoring of known damage events, and – through the accumulation of data about damage events – a better understanding of risks and the causes of losses. Between 2015 and 2017, over 25 million articles have been analyzed already and over 75,000 fires have been identified at an early stage in the USA and the UK alone. Besides the internal use of this information, Munich Re also hopes to make some information on losses available to its customers.