Mastering Location Data: Close But Not Quite There
Pricing home and automobile insurance policies depends on a detailed understanding of the property being insured. Currently, though, a lack of nuanced understanding of location is causing insurers to gauge risk imprecisely—sometimes to a dramatic degree. At the same time, IT departments are frustrated with trying to manage growing mounds of data in order to react quickly to their organizations’ needs. Taken together, there’s a risk management gap confounding insurers and the organizations that are their customers.
An emerging sentiment is that the insurance industry needs a new, all-encompassing approach to location master data management (MDM), the method of defining and managing critical data to create a single point of reference, to address the situation. This approach requires three elements to be in place: 1) the location data be hyper-accurate, which means going beyond basic postal address information and using geo-coordinates and other data for greater precision; 2) that there is a unique and consistent identifier for each property; and 3) the ability to link other data sources to the property identifier exists.