Broker Aon says a new flood evaluation tool is potentially “transformational” in helping the industry address rising premiums linked to inundation risk.

Aon's initial modelling of the Australian-developed technology shows 13% of at-risk properties could see a reduction in the flood-specific portion of their premium by at least 50% when the height of their first occupied floor is considered. 

The First Floor Elevation tool uses AI-driven aerial and ground imagery to calculate whether an individual building is at risk from flooding and is developed by Geoscape Australia, a location intelligence data firm owned by the Commonwealth, states and territories. 

“At a time when extreme weather events and inflationary pressures are pushing up insurance premiums and putting adequate insurance cover beyond the reach of many Australians, this technology could really transform flood risk assessment for the sector,” Aon Asia-Pacific head of risk advisory James Knight said. 

“Having a more realistic understanding of flood risk for individual properties means insurers can price with greater confidence and, for those with raised floor levels, help keep flood cover more affordable and accessible.” 

Aons says it is embedding the tool across its risk advisory and data products, which reach more than 90% of Australia’s insurance sector. 

The broker and Geoscape plan to roll out the technology and they have already shared the tool’s potential with insurers and banks. 

Geoscape CEO Dean Capobianco says the flood assessment tool is capable of “solving an Australian problem, with the potential to support more affordable premiums and more accessible insurance. 

“Two homes in the same flood zone can face very different risks. This technology replaces broad assumptions with a more precise view of each individual building.”