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InsurTech Ohio Spotlight Interview with Avinoam Baruch

Avinoam Baruch is the Co-Founder and Chief Operating Officer of Previsico, a company specializing in flood forecasting, warning and monitoring with a clear mission to minimize the impact of flooding globally. Avinoam was interviewed by Andrew Daniels, Founder and Managing Director at InsurTech Ohio.

Avi, tell us about your journey from university-based research to building a business around the new technology.

“Our story began in 2001 when my Ph.D. supervisor developed a new flood modeling software. He started publishing around its use in different environments and contexts i.e. surface water, river and coastal flooding. In 2014/2015 Prof Yu won several substantial research grants together with the UK government and Met Office to leverage the software and develop a live flood forecasting system that could capture the sorts of events e.g. surface water flooding that catch people off guard. This software generated real-time flood warnings indicating where floods would occur based on changing weather conditions, land cover, geology, topography and hydrodynamics. That project led to a research team forming at the university, of which I was part.

After I finished my Ph.D., I continued my research and decided that this technology had a great opportunity to be scaled up globally.We had proved it could work at the university, but we needed to take it to market. We then took our technology, built a team, commercialized the software and scaled it up, so we could support customers across the UK and now the USA and beyond too.”

How can insurance companies play a larger role in spinning out technology like this? What can they do to encourage more insurance-related technology research?

“It's a huge challenge and one where I think some universities do better at this than others, and some insurers do better than others. There is a lot of research on our weather and climate, particularly here in the UK which isn't being used on the front line because it takes time for new research and technology to be adopted. That's partly a challenge for universities to be more socialized within the industry, but also for insurers on learning how to work with the universities and help them take their solutions to market.

Some organizations do it really well. In the US you have quite a few successful spin-outs from the likes of Stanford, et cetera. But in the UK there's a lot less of it. What can we do more to aid this? We were lucky to be a graduate of a great program in the UK called ICURe which helped provide us with funding and expertise to launch the company. These sorts of initiatives need to be expanded to help grow the right ecosystems, bringing investors, advisors and academics together. In most universities these days, there's a lot of emphasis on engagement with industry and making sure that the research outputs are being used by industry. These, however, need to be accompanied by better routes to commercialization, either through licensing, funding or spin-outs”

Digging a bit more into your specialty, how is flood modeling changing?

“Recent years have seen a marked improvement in the data that's available which can support flood modeling and forecasting, from an elevation, land cover, geology, drainage and sensor data. One area that I think is particularly exciting for us and where we're putting our focus is on live modeling. The challenge with traditional risk mapping techniques is that you run predefined scenarios and they never really occur in real life. Every weather system is different, every flood event is different. In order to accurately forecast events, it’s best to model events as they're approaching to produce an as-accurate-as-possible outlook. We've been able to run live models continuously in the cloud, providing outputs in time for them to actually be used on the ground. The ability to speed up somebody's computational processes has allowed us to provide some very exciting outputs that we wouldn't have been able to provide a few years ago.”

Why is this flood forecasting so important and why is the US an optimal market right now?

“Most flood impacts are avoidable if you understand your risk, you have an action plan of what to do when you're expecting a flood, and you have measures you can take to minimize impact.

There are many actions that you can be taken. Typical examples include car dealerships and art galleries moving stock to higher ground. If you have some flood defenses, you can set these up and if you have vulnerable tenants, advise them that there's an elevated risk. However, often you can also take what we'd describe as ‘no regrets’ actions, just helping everyone understand what the plan would be if there is a flood.

There's so much that you can do to minimize the impact of flooding. It's a massive shame that it doesn't always get done. This is where flood forecasting can really help people to be far more proactive. That's where I think there is a huge opportunity for insurers to get more involved in that sort of technology and provide those sorts of insights to help customers be more resilient. In terms of the US, I think there are some really exciting examples of how wind and hail alerts have already been used by insurers to warn customers with excellent impact. Companies like Travelers and Liberty have all done that. But there is so much more opportunity, especially around the flood forecasting side. That's where we feel that there is a particularly great opportunity for us and that's why we've chosen to scale up across the US.”

How do you see prediction and prevention tools like this playing a role in carrier differentiation?

“What we see, especially from the main insurers', is that they're there to partner with you to help you reduce and manage your risk. That's what insurance is all about. You especially see this with a larger complex commercial risk, but it's now filtering down to the personal lines level. Insurers are realizing how much they can help their customers reduce their risk by sharing their insight and tools. It's a win-win, but it also feeds down to the brand and what they're trying to achieve with their customer. I think that's why people are going to want to stay with their insurer in the future because the insurer understands them and can help them mitigate flood risks in their own way.

Prevention is creeping into insurance. We’ve had many early success stories in the flood space, but now we’re seeing a lot in the cyber space. Why do people buy cyber insurance? Well, they care about the insurance, but they also care about managing their risk. The same is true with hail, flood and healthcare. People want not just to benefit from the risk transfer, but also from the wider support you can get with mitigation. I think that's where the brands of insurers can play a huge role as we go forward. I expect this area to regrow substantially in the next few years.”

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