I’ve written a lot about how the insurance industry is changing, and how startups and companies that embrace digital transformation are reshaping the model for the insurance industry. And while concepts such as IoT and Big Data are important to discuss in the abstract, it’s equally important to look at real-world cases of disruptors in our industry.
One such company is Meteo Protect, a French startup that looked at the way our world is changing and used digital transformation to address both the challenges and opportunities it presents. In recognition of its outstanding innovation, Meteo Protect recently received the Celent Model Insurer 2017 Award in Data Mastery and Analytics.
The vision for Celent’s Model Insurer research is to try to answer an apparently simple question: “What would it look like for an insurer to do everything right with today’s technology?” Data Mastery and Analytics has evolved at great speed and is more relevant than ever to insurers looking for growth and efficiency. In each case the Model Insurer is using data in an operational setting to impact their processes. They also had an expert partner and leveraged a data product applied to insurance. Insurers brave enough to invest can create opportunities by leveraging data, new technologies, and their partners to make a real difference in how the business operates.
So, let’s dive deeper into how Meteo Protect built and perfected its innovative solution with help from the SAP HANA platform.
A climate for change
Today, weather variability can affect the profits and operating costs of almost any business across every sector. Meteo Protect noticed that with climate change, both the frequency and intensity of weather abnormalities have doubled over the last 15 years. Despite having traditional operational risk management strategies in place, many companies still experience earnings volatility and sizable losses caused by weather. Meteo Protect’s vision was to give its clients a means to evaluate how climate variability contributes to their companies’ results, analyzing the relationship between each business activity and the weather.
Meteo Protect assembled the largest team in Europe dedicated to weather risk management. The team developed a platform called Vivaldi for providing weather risk management solutions that offer customized index-based weather insurance to farmers and others. The associated Web-based app lets customers select their policy specifications, including geo-location, coverage period, and weather parameters.
Platform improvements with SAP HANA
To support the app and the platform, Meteo Protect went in search of a scalable, powerful solution to solve its storage and analysis needs. The company decided that the SAP HANA platform had the ideal mix of performance, security, and ease of implementation and use. With collaborative help from the SAP Startup Focus program, Meteo Protect re-architected Vivaldi around SAP HANA. The platform taps into many data sources, including 40 years of climate history; current readings from satellites, remote sensors, official stations, and other global weather data sources; and other input such as commodity prices and crop yields. Within a second, SAP HANA analyzes more than 80 billion quality-controlled weather data observations to determine risk and provide customers with the most cost-effective financial coverage.
Meteo Protect started with SAP HANA on premise but then moved to using it in the cloud. The move to the cloud has freed up resources to the point where no IT personnel are needed to manage the database anymore – the database management is run by SAP. Since moving to the SAP HANA platform, Meteo Protect has experienced 8x faster scenario pricing, 12x faster data uploads, and an almost 7:1 data compression rate.
A focus on startups
SAP sees the huge potential that InsureTech startups should disrupt and change the insurance industry for the better, and they’re committed to helping startups around the globe.
Meteo Protect was drawn to SAP solutions because it found that almost 100% of its largest clients – insurance and reinsurance companies, brokers, cooperatives, and corporate enterprises – used SAP software. With the SAP Startup Focus, Meteo Protect was able to obtain validation and certification of the platform by SAP before releasing Vivaldi to the market. The company also found that the certification from SAP was very important for its customers’ trust and peace of mind. And since rolling out Vivaldi, Meteo Protect has been able to rely on support from SAP for database management, making the most out of its limited personnel resources.
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