Budget Direct launches automated hail warning system

The system tracks storms cells and pushes SMS alerts to customers of impending hail — could lift customer service and potentially reduce claims

Automotive insurer Budget Direct has launched a hail automated notification system (HANS) able to alert its customers via SMS of impending hail storms in their area.

The system, which was put to the test last week to push out 70,000 messages during hail storms in Melbourne, is designed to encourage customers to move their cars into shelter in advance of major hail storms.

According to A&G Insurance Services — the parent company of Budget Direct — director of IT, Paul Malt, said the system, under development for a number of years, started out by taking weather feeds from the Bureau of Meterology with a vision to then warning customers about impending storms.

“What we found… was the volume of warnings about storms from the Bureau — as they are so broad — was to a point where we were almost the ‘boy who cried wolf’; we’d be telling you too often that there is a severe storm coming your way,” he said.

To better refine the system and enable it to more accurately pinpoint spots of potential hail, the company brought in a weather expert to assess the finer points of storm cells.

“The system tracks storms cells, measures ice at various levels, determines if the hail will be damaging when it hits the ground, and then generates areas to warn — the probability hail will fall in that spot based on the way the storm is tracking,” Malt said.

“That is adjusted every few minutes based on the direction of the storm to say this is the area it believes which should now be warned of impending hail.”

HANS, which has been running without the alert capability up until the Melbourne storms last week, is able to calculate a window of time before hail will begin hitting the ground and will warn customers up to five minutes before hail begins to fall. The system will choose not to warn customers if the window is less than five minutes due to the chance customers will be struck by hail in the process of moving their cars.

Malt said the system is constantly on the look-out for storms and is capable of tracking multiple storms across the country. Only when a certain hail probability threshold is reached, the system would begin warning customers.

Currently, the system bases customer location on the home address on file with the company. However, in an effort to improve accuracy, it is examining allowing customers to provide a work address and time information as well as potentially location-based data from mobile devices.

“Over the next couple of years as people become more used to location-aware applications I can see a real possibility for this to link to the mobile phone. It is always with me, it knows here I am, therefore the system knows where I am,” he said.

“It will take time for people to get used to applications like that, but we’ll judge it on the public and how they feel about location aware applications.”

Malt said the company is also in the process of educating the system, running data from past years’ storms repeatedly through HANS to help it better refine the decisions it made.

While the system has the potential to significantly cut down costs to the company as a result of paying out hail damage claims, Malt said it is to be primarily used as a customer service — not cost-reduction — tool.

“We have approached it as a customer service thing,” he said. “Even if it doesn’t reduce claims, we still think it is beneficial to customer service.

“Though, at the end of the day, if we can reduce costs then we can provide cheaper premiums. We really see it as a win-win for everybody.”

Follow Tim Lohman on Twitter: @Tlohman

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