Pinpointing the Issue: Why hyper-accurate location data can’t be overlooked in Insurance
Insurance, at its core, is a pricing game. As much as differentiated service or product offerings may help win customers, it’s the ability of an insurer to accurately price its premiums that is critical to sustainable, long-term profitability. Accuracy in pricing depends on the accuracy of the underlying data used to determine risk. “If you are locating an address, you expect that the given latitude or longitude lands inside the building footprint,” says Dan Adams, senior vice president, data, cloud strategy, and operations at Precisely. “But often you’re running the risk that doesn’t happen.”
This lack of precision is commonly overlooked because it’s generally considered accurate “enough” to price risk for property and casualty insurers. But is “close enough” truly “good enough” when measuring proximity to fire, flood and other risks? This briefing is about those cases where it’s not; where imprecise location data exposes insurers to big losses. Here’s why data improvements represent a significant opportunity to prevent those losses and avoid adversely selected, underpriced policies.