Digital hazard monitoring of natural forces helps the real estate industry with risk management

An extraordinary number of property owners had to contend with natural disasters in 2024. According to Munich Re, the damage caused worldwide reached a record level of 340 billion US dollars last year, but only around 40% of this was insured. Whether it’s flooding after continuous rainfall or flash floods and mudslides after thunderstorms, anyone whose property is located on a slope, for example, may be living dangerously. This is by no means about scaremongering but about being aware of impending risks and taking appropriate precautions. But how can this be achieved? The new digital hazard monitoring system from SMG Real Estate and IAZI tackles precisely this problem and helps property owners and those who are on their way to becoming one.

Fortunately, the days when people were defenceless against the forces of nature are long gone. And yet even in modern society, there is still the threat of various forces of nature that can cause major damage. As climate change progresses, it is not only extreme weather events that are becoming increasingly talked about but also the costs of the associated damage. Several such events over the past year in Switzerland alone – including the washed-away motorway bridge in Misox or the flooding in the Maggia Valley – illustrate this once again.

Address dangers, raise awareness and protect against risk
Anyone who owns or wants to buy a property is primarily concerned with criteria such as the amount of space available, the condition of the building structure and, of course, affordability. When it comes to location, often only the view and the availability of shops, doctors’ surgeries, childcare facilities or public transport connections are taken into account. At the same time, however, any risks resulting from the geographical location are usually ignored. However, it is precisely this careless misjudgement that can have serious consequences under certain circumstances.

According to the Federal Office for the Environment, a good 7% of the Swiss population live in places that can be affected by avalanches, landslides, rockfalls or rockslides. More than 20% are even exposed to the risk of flooding. The dangers resulting from forces of nature are often overlooked or at least underestimated. As a result, some property owners have painfully learnt over time that it would have made sense to consider the risks at an early stage to actively prevent existential risks with the right precautions, appropriate structural changes, and additional insurance. Recognising the potential danger is therefore crucial. This is where IAZI comes in, having stood for expertise in property valuation for over 30 years. As part of its wide range of property-related services, IAZI has made it its mission to present potential natural hazards transparently for all players in the property sector. “We have been working flat out on a digital hazard monitoring system that enables a comprehensive assessment of natural risks both before the property purchase and during the ongoing portfolio valuation,” explains Roman Ballmer, Deputy CEO at IAZI.  

Digital hazard monitoring transparently maps eight forces of nature
This is made possible by linking a wide variety of national, cantonal, and proprietary data sources, which is unique in this form in the Swiss market. This gives property professionals a valuable tool for providing their clients with reliable, well-founded advice on this aspect of a property. Monitoring also gives property managers an ongoing overview of the values and risks of the portfolio under management.

Specifically, IAZI’s data-based solution provides information on the relevant natural hazards such as flooding, surface runoff, hail, storms, rockfalls, earthquakes, avalanches and landslides for every location in Switzerland. All risks are divided into different hazard classes and colours based on the standardised values of the public authorities, with particular attention being paid to the hazard classifications ‘significant’ and ‘medium’. While financial institutions are increasingly required to provide regulatory risk reporting, existing and future homeowners will now also benefit from the transparency this creates. Roman Ballmer also emphasises this development: “In addition to renovation and financing issues, the long-term definition of a property strategy also includes taking into account and proactively hedging against nature-related climate risks”.