Insurers locate competitive advantage with Ordnance Survey
22 September 2006
A revolutionary vision of insurers understanding and pricing risk by acting on high-precision geographic information (GI) at their fingertips was a key focus of an exclusive industry seminar at the Lloyd’s Building in London.
Underwriters from some of Britain’s leading insurance companies attended the Ordnance Survey event to see how geographic intelligence can pinpoint areas of exposure to risk to enable more competitive pricing and manage reinsurance cover.
Layering information such as claims histories, policy details and accumulations on precise geographic coordinates can improve the understanding of trends, hot spots and scenarios to inform underwriting, delegates heard.
“Everything happens somewhere,” Ordnance Survey’s Gavin Lewis told the audience. “A clear geographic context, rather than simply a text-based description, can help you identify and visualise what you are insuring, where it is and what is around it. If you don’t have that information, it is more difficult to price risk accurately and be sure that accumulation management and reinsurance capacity is correct.”
As well as underwriting risk, the event considered the capacity of GI to separate genuine from fraudulent claims and develop counter-fraud measures. “By analysing where multiple claims come from using geography, you have a powerful intelligence-led application which can help in fraud detection,” Mr Lewis said.
The event, supported by technology partners QAS, GroundSure and Mapflow, followed the launch of enhancements to Ordnance Survey’s most detailed digital address data, OS MasterMap Address Layer 2.
As well as defining and locating more than 27 million postal addresses, the enhanced information includes around a million so-called OWPA (objects without a postal address) such as depots, masts, community halls and warehouses. Although they do not have postal delivery points, these properties are all potential risk locations. The data also includes details of around half a million multiple residences and flats with no individual postal delivery points.
By improving the identification of individual properties, whether on an individual or collective basis, there is greater potential for insurers to boost analysis and decision making. In handling flood risk, for example, the enhanced data can help avoid the kind of simplified assumptions that lead to higher ground properties within a flood risk postcode or property cluster experiencing expensive insurance premiums or difficulty getting cover.
Ordnance Survey has also begun supplying packages of aerial images with special viewing software designed to show the height, shape and design of buildings from oblique angles, including the four points of the compass. Access to multiple perspectives is particularly useful for insurers in need of a detailed view of the elevation and surroundings of buildings. The images are being captured at 15-cm resolution under a rolling programme focusing on towns and cities across Great Britain. Eighty per cent of major conurbations, including London, are scheduled to be available by the end of 2006.
“Many kinds of geographic data can be overlaid with other datasets to profile risk portfolios by region, locality or peril,” said Mr Lewis. “This can be on an individual basis or through combinations of different or accumulated factors. It enables a better understanding of risk accumulation, aggregation and management, offering greater confidence in the underwriting processes.”
Notes for editors:
QAS is an Experian company and has worked with Lloyds TSB for over 10 years, providing address management products to enable the fast and accurate capture of customer names and address information. www.qas.com
GroundSure offers clients the opportunity to purchase environmental insurance covering costs for legal defence or remediation clean-up costs in the event of a site being deemed as contaminated land under the Environmental protection Act 1990. In many instances these costs can run into tens of thousands of pounds, therefore GroundSure offers property purchasers, in both the residential and commercial sectors, insurance cover that indemnifies the owner in such an event. Ordnance Survey’s mapping underpins these reports and insurance quotes by providing the most up-to-date and robust data available, making it fit for purpose throughout GroundSure’s range of environmental risk screening reports and insurance quotations. www.groundsure.com
Mapflow uses Ordnance Survey data as the preferred mapping layer of its RiskView and PolicyView solutions for the insurance industry. These solutions aggregate external data – such as mapping data from Ordnance Survey, aerial photography from CitiesRevealed and perils data from ISL Experian, GeoSure and NaFRA – with internal policy and claims data into a single-user interface in order to improve profitability. Within underwriting, RiskView allows the underwriter to price according to the risk associated with the individual property rather than for the postcode or postcode sector. Within claims, settlements are agreed more quickly by identifying the location of the claim relative to factors affecting the claim, such as road layout, building layout or the proximity of vegetation. www.mapflow.com
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