Friday, August 12, 2022

The Tech Company helps companies respond to natural disasters

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By AllBusiness Editors

Safehub Inc. is a San Francisco-based technology company. The company’s advanced internet-connected sensors, data analytics platform and actionable alert system provide organizations with remote estimates of building-specific damage immediately after natural disasters. The technology enables companies to quickly prioritize their response to disasters, such as earthquakes, to speed up response to emergencies and reduce losses from business interruptions.

We sat down with Andy Thompson, co-founder and CEO of Safehub, to find out how this technology is changing the catastrophe risk management game, how it has improved business continuity procedures for current customers, and how it will affect insurance transactions.

Thompson, a former global leader in catastrophe risk and insurance at the engineering firm Arup, has extensive experience increasing the resilience of the built environment through engineering design and disaster response. He is now on a mission to transform disaster risk management at scale by applying the latest technological advances to the problem.

Why did you start Safehub?

Early in my career, I helped improve client security and resilience one consulting project at a time. I co-founded Safehub to scale this, using the Internet of Things (IoT) and data analytics to increase the security and resilience of any building exposed to disaster, not just a handful of “key” buildings. The moment I decided to start the company was when I realized that my used car had 67 sensors in it, while the high-rise building, worth more than $100 million and more than earthquake-exposed I was in, had zero sensors for structural stability. The juxtaposition killed me. Something must have been done.

The key to what we do at Safehub is to make the technology so easy to install and use, so useful in disaster relief, and so affordable that it becomes ubiquitous. We envision a future where every building in the world is monitored for the damaging effects of natural disasters, including the effects of climate change. If the technology is available and affordable, why shouldn’t it be the future?

What does your technology actually mean?

Our first product is to help assess damage after an earthquake. The origin of our data logging is a cheap, self-installed sensor the size of a smartphone. We want about one to three sensors per building, depending on the size of the building (a few more for complex or very tall buildings).

We send the sensors to our customers and it takes about a minute to install them. One customer said installation is easier than hanging a picture frame. The sensors are mobile connected to the cloud, so there is no need to connect to anyone’s network. We then immediately start collecting data, both about the inherent dynamics of the building itself and any vibrations caused by earthquakes. The buildings are monitored 24/7 and send analytics and alerts from every building in the world to every smartphone in the world.

When an earthquake occurs, we measure what is happening on the ground floor and inside the building and relate this information to the basic constructional features of the building. We also characterize the building’s resonance frequencies (the way it naturally vibrates) and monitor any changes. Changes in a building’s natural vibration frequencies can indicate damage.

Based on this data, our algorithms calculate the probabilistic potential for structural damage (color-coded green, yellow, red), financial loss and downtime. We then send SMS and email alerts to our customers so we can estimate the damage to the building in minutes. We also provide a wealth of data through our platform to structural engineers and others who may need more detail when assessing the building.

Can you give us a specific example of how the technology works?

Let’s say you are the risk manager of a US-based global company that operates several buildings in Japan. You work and live in Boston. At 3 a.m. Boston time (4 p.m. in Japan), there is a moderate M7.1 earthquake off the coast of Sendai, Japan. Several of your buildings have been affected. Within minutes you will receive an SMS alert to wake you up to the problem. You see that four buildings have been affected: one green (structural damage unlikely), two yellow (structural damage possible) and one red (structural damage probable).

You receive this information before any other news source or data feed, and you are ahead of the game. You send a summary report to senior management, estimating the impact on the organization, and send loss and downtime estimates to your insurers to stay ahead of potential claims. You will coordinate with local teams, who have also received this information, to help them prioritize response and help them make building evacuation decisions. As the hours and days unfold, information from the Safehub platform helps to reopen buildings faster, reducing losses from business interruptions.

Do you replace technical inspections after calamities?

No, just the opposite. We support and complement technical inspections in two ways. First, we help to prioritize response: which buildings should be inspected first. Second, we provide detailed information on terrain and building effects that are extremely helpful in assessing damage. Damage, especially structural damage, is not necessarily seen; our technology provides objective data to reduce the guesswork. In the case of earthquakes with sustained aftershocks, it is important to get as much information as possible to help engineers make the most informed decisions. We cooperate with several world-class structural engineering firms.

How does the venture capital community characterize you?

We are a SaaS (Software as a Service) IoT (Internet of Things) company spanning several sectors including insurtech, proptech and climate technology. We are funded by well-known venture capitalists in the Silicon Valley/San Francisco ecosystem. We are also proud of our strategic investments from JLL Spark Global Ventures and Hannover Digital Investments (part of HDI Group which also includes Hannover Re).

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Who are your customers and target groups?

Our clients include Fortune 100 companies, government, commercial real estate organizations and insurers. We work with entities that use, manage or own multiple physical assets in areas exposed to natural disasters.

What is the market opportunity for the company?

Safehub’s technology is used worldwide. It is applicable to office buildings, warehouses, big box stores, manufacturing facilities, refineries, schools, hospitals, airports, apartment buildings and many other types of buildings. For our earthquake product alone, the probability represents a third of all buildings in the world.

As we face wind, flooding and other effects of climate change, this is increasing to almost every building in the world. Smoke detectors in buildings were rare until they became cheap and easy to install in the 1970s. Now they are ubiquitous. We see a similar trajectory.

How will this technology affect insurance transactions?

The value we now provide to insurers is twofold: first, we reduce business interruption losses and thus claims on a BI policy; and second, we provide their policyholders with a value-added solution that can be included as part of loss control.

We are also in talks with insurers about developing parametrically triggered products based on the data from our sensors. The concept is to have a very simple and clear trigger for the policy payout that is not based on the years of claims process. Having a sensor in the building aligns the actual damage with the payout better than more generic approaches currently available on the market. We reduce the basic risk.

What is the technology product roadmap for Safehub?

Our vision is to transform risk management for natural disasters, which are becoming increasingly important with climate change. We strive to transform and retrofit post-disaster response, insurance claims, underwriting and engineering design for earthquakes, winds, floods and other hazards.

Through technology, we connect building-specific risks with portfolio-level risk decision-making. In doing so, we link the price of risk per building to the actual risk, thereby encouraging risk reduction and better risk management.

In this way, we will make the world in general safer and more resilient to disasters – by creating a financial incentive to do so.

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