Why has an insurtech, founded by former military intelligence personnel, made the move into space?
Forbes McKenzie, chief executive officer of McKenzie Intelligence Services, admits that it’s an unusual move for the company which, in 2021, partnered with Lloyd’s to provide the market with access to multi-source intelligence including world-class satellite imagery, supporting the ambition set out in the Future at Lloyd’s Blueprint Two to build the world’s most advanced digital and technology-led insurance market place.
“Our approach to the London insurance marketplace under our contract with Lloyd’s, is that we will always provide the best data available to solve a problem. Tying ourselves to a particular data source goes against the promise we’ve made.
“However, in this instance, we’ve tied ourselves to this particular data source in order to answer a very specific problem,” said McKenzie in a video interview with Intelligentinsurer.com, the digital hub for interviews, debates and panel discussions.
The problem: a lack of availability of night-time satellite images. In February 2021, the state of Texas suffered a major power crisis on the back of a severe winter storms. McKenzie Intelligence Services was receiving questions from insurance clients who wanted to understand where the power outages were.
While the insurtech could take pictures during the day after the event, it was difficult to source any night-time photos.
McKenzie said: “We have co-invested in satellites in order to guarantee getting a picture of the cityscape at night. It means that the next time there’s a freeze event we’ll able to answer those questions with the fidelity we require.”
“We have co-invested in satellites in order to guarantee getting a picture of the cityscape at night.”
Forbes McKenzie, McKenzie Intelligence Services
Currently, the insurtech meshes all its information together to turn it into intelligence. That intelligence becomes a “library” that is timestamped.
“We were restricted to seeing an event only in daylight hours, now we can see events at night. The eight to 16 hours of the day (depending on the season) that were traditionally dark, can now be categorised and we can capture the event,” he explained.
After the library is created, the insurtech can add the customer’s risk data and create a portfolio insight. “This provides a line by line understanding of what has happened to every risk across the Lloyd’s marketplace as the event unfolds,” McKenzie said.
All this information sits on the company’s Global Events Observer (GEO) platform, the user interface it uses to deliver intelligence to the Lloyd’s marketplace and managing agencies.
“We learned from hurricanes Harvey, Irma and Maria in 2017 what the insurers needed to understand, when they needed to understand it and how they needed to consume it. The GEO is designed to take in any data that is relevant to answer the problem that is required,” he added.
The past and the future
The work undertaken by McKenzie Intelligence Services is very different from how the insurance world worked in the past. Instead of obtaining satellite images, an adjuster with a clipboard would need to get to the location and do a site inspection.
“Often the insured wouldn’t be doing a first notification of loss because they weren’t in the event footprint as it wasn’t safe. There were also timing issues getting to the location,” said McKenzie. “Now, humans are still an important part of the response, but we can triage that response and identify the hotspots.”
“Insurance, for the first time, can be based upon the property giving its own readout.”
A first notification of loss can be triggered immediately and an electronic payment can be made on the back of intelligence.
Times have also changed on the space front. When McKenzie first worked with the space industry, some were buying former Russian nuclear missiles, taking off the nuclear warhead and strapping on their own satellite.
“In 2021, we reached out to satellite imagery company Skybox, who came up with idea of launching small satellites that were the size of a beer fridge. That’s revolutionary because most of the cost is getting those satellites into space,” said McKenzie, who believes that this truly “democratises getting satellites into space”.
More than 100 micro- and nano-satellites for commercial and government customers were aboard the Transporter 3 rocket when it launched. McKenzie had invested in Scotland-based space venture Alba Orbital’s Unicorn-2 constellation, sending three branded satellites into space.
In addition to the insurtech’s latest venture into space, McKenzie is very excited about the future.
“At the minute we look at risk location—in the future the risk location will speak to us. The world has smartphones and homes increasingly have internet of things appliances, so homes can speak to us,” he said.
As an example, McKenzie cited Amazon’s Ring (a video doorbell)—“if you have a picture from the front doorstep and it has water on the ground, we can assume there’s going to be water inside the property too,” he said.
“Insurance, for the first time, can be based upon the property giving its own readout and underwriters and actuaries can then work with those owner datasets,” he concluded.
