Big Data in the Dirt (and the Cloud) - Quentin Hardy

Everybody talks about the weather, but nobody does anything about it. Except the folks at Climate Corporation are crunching huge data about weather patterns, and packaging predictions into crop insurance:

Quentin Hardy via NY Times

A company called the Climate Corporation was formed in 2006 by two former Google employees who wanted to make use of the vast amount of free data published by the National Weather Service on heat and precipitation patterns around the country. At first they called the company WeatherBill, and used the data to sell insurance to businesses that depended heavily on the weather, from ski resorts and miniature golf courses to house painters and farmers.

It did pretty well, raising more than $50 million from the likes of Google Ventures, Khosla Ventures, and Allen & Company. The problem was, it was hard to sell insurance policies to so many little businesses, even using an online shopping model. People like having their insurance explained. The answer was to get even more data, and focus on the agriculture market through the same sales force that sells federal crop insurance.

“We took 60 years of crop yield data, and 14 terabytes of information on soil types, every two square miles for the United States, from the Department of Agriculture,” says David Friedberg, chief executive of the Climate Corporation, a name WeatherBill started using Tuesday. “We match that with the weather information for one million points the government scans with Doppler radar — this huge national infrastructure for storm warnings — and make predictions for the effect on corn, soybeans and winter wheat.”

The product, insurance against things like drought, too much rain at the planting or the harvest, or an early freeze, is sold through 10,000 agents nationwide. The Climate Corporation, which also added Byron Dorgan, the former senator from North Dakota, to its board on Tuesday, will very likely get into insurance for specialty crops like tomatoes and grapes, which do not have federal insurance.

Like the weather information, the data on soils was free for the taking. The hard and expensive part is turning the data into a product.

The future of every kind of insurance is big data.

(via Food+Tech+Connect)