The IoT promises us an escape from uncertainty. One of the biggest reasons we want to embed sensors in our environments and operations is because with more data, we can deliver better insights. In manufacturing, those insights could lead to better yields or fewer injuries, while in the home they might help us conserve power or deliver personalized medicine.
Safehub, a California startup that sells an earthquake damage assessment service, is banking on its ability to safely reduce uncertainty in the wake of natural disasters. The six-year-old company just scored a $9 million Series A round to build out its sensor-based intelligence service.
Andy Thompson, a former structural engineer who is now the co-founder and CEO at Safehub, said the company uses accelerometers installed in a few places throughout a building to immediately measure the impact an earthquake has on the building’s structural integrity. Typically, buildings typically get shut down after an earthquake hits while their owners get a structural engineer to determine whether it’s safe for workers to go back in and operations to continue.
With Safehub’s service — which costs $1,000 per year, per sensor — the building’s owners can confidently assess how the building handled the earthquake and decide whether or not to resume operations without waiting a few weeks for a structural engineer. The sensors can track the movements of an earthquake as it happens and also constantly track what Thompson calls “the frequency of the building” in the meantime.
To track the general safety and ongoing motion associated with a building, you need two sensors. The Safehub system runs algorithms on both of its sensors: first to determine the magnitude of an earthquake, then to track the normal building vibration to uncover anomalies. Because Wi-Fi isn’t reliable after an emergency, Safehub uses cellular to connect its sensors to the cloud. Limited bandwidth means that data must be processed on the sensor so only small insights are sent over the cellular network.
Helping its customers quickly resume operations after an earthquake is only one part of Safehub’s business; Thompson is also working with insurance companies to develop policies based on the data it collects. With an accurate understanding of how a building performed during an earthquake, the insurer can deliver the right payout and eventually adjust its actuarial models.
For many insurers, being able to replace their actuarial assumptions with real-world data is one of the biggest promises of the IoT. Since insurance is literally the art and science of pricing risk (uncertainty), the IoT will likely fundamentally change their business. Thompson, for one, expects insurers to be able to create new forms of insurance based on actual data, not actuarial data.
One of the trends in insurance today is the use of parametric policies, which pay customers a set amount based on the magnitude of a certain event as opposed to the easement of their loss. The idea is popular for certain types of claims because the customer gets a check regardless of the actual damage, and gets the check quickly. Insurers can benefit because in exchange for a fast payout, they may not be on the hook for as much in damages.
With sensor systems such as Safehub’s, parametric insurance could become personalized with a quick payout sent immediately based on the actual damage indicated by the sensor readings. The aggregate data from the network of sensors in a particular area could also be hugely valuable to insurance companies trying to update their actuarial models.
I also see promise in the aggregated data because in the immediate aftermath of a disaster it’s not just insurance companies that want to quickly assess the damage. Cities might use the data to prioritize where they send emergency staff, for example, while companies would welcome information about how a natural disaster affected their suppliers’ operations. Wall Street would undoubtedly like this information as well.
Thompson says getting that aggregate data is a future project, although he says some customers are already pushing the Safehub solution to their suppliers to get a better understanding of how their own operations could be affected. I respect our desire to reduce uncertainty in a world that has become ever more uncertain, but I’m much more excited about how companies and cities can use this data to boost resiliency.