CelsiusPro: Big Data for Better Insurance

Mark Rüegg, CEO and Founder, CelsiusProMark Rüegg, CEO and Founder
As the world embraces big data and the internet of things, the insurance sector is one that is slowly warming up to these trends. However, the sheer number of legacy systems that are in place with insurers and operational inefficiencies cause a bottleneck for the entire process. Zurich-based CelsiusPro is the leader in digitalised solutions for Parametric Climate and Natural Catastrophe (NatCat) insurance. CelsiusPro’s online platform enables insurance companies to digitalise the entire insurance value chain from frontend to backend; not only for index-based insurance products but also for traditional indemnity-based products.

“If you look at the weather index insurance over the past years, it has shifted from being solely weather station-based to satellite-based insurance products,” explains Mark Rüegg, CEO and founder of CelsiusPro. The global availability of satellite data with long historical data has caused a massive shift in the opportunities and applicability of parametric insurance solutions. As satellite data allows for much finer resolution images, it enables more advanced Insurtech solutions to be formulated. “Today, products are being created based on the vegetation index that was previously impossible. Now the trend is toward yield index insurance, so you don’t take the weather as a proxy, but you take yield data, price and settle on regional yield data directly,” continues Rüegg.

The company uses publicly available climate, vegetation, yield and NatCat data from various sources, importing about 120 million new data points daily. CelsiusPro has implemented a big data architecture for high-performance data processing, offers APIs to provide access to the data, and monitors weather and climate conditions for risk management and settlement services.

CelsiusPro has designed straight-through processing—right from pricing, execution, policy issuing to settlement—the entire policy life-cycle management. The platform also calculates the settlement values for parametric products, i.e. determining whether parametric policies payout or not and how much.

CelsiusPro’s modular software services enable clients to implement plug and play InsurTech solutions for front to back digitalisation

The firm has an Environmental Monitoring tool that provides insurers as well as other stakeholders in the insurance industry analytic and visualisation features to explore historical data of individual satellite data points or aggregated values for administrative units such as states, districts or villages. Users can customise the dashboard based on their main interests; add various NatCat, weather and climate variables to see how an area was affected by a hazard or how climate and vegetation changes, intra-annually and over time. The organisation also performs correlation analysis to identify the weather impact on the business in different industries like transport, retail, agriculture and energy with the goal to structure index-based insurance products to mitigate the risk of clients.

CelsiusPro offers a modular solution-portfolio which is 80 percent off-the-shelf software as a service, with 20 percent of customisations to serve the individual client needs. This has proven to be an ideal approach to balance implementation speed with the need for customisation while still offering ‘tailored’ turn-key solutions.

Rüegg’s organisation is expanding geographically. Having entered the Europe, Australia, Asian and African markets, CelsiusPro is also looking to enter the Americas. It is in the process of assessing additional parameters for new index insurance products. Just recently for example it has sourced a forest fire data set from NASA and is exploring how they can design an ideal parametric product for forest fires. The company is further developing a crop model that will be useful for insurers to forecast the expected losses of different crops in regions of interest.