Property and Insurance Company Uses Geolocation Accuracy to Lower Policy Risks and Improve Pricing
Insurer re-evaluated risk and pricing models previously used in pricing decisions with geolocation accuracy.
When this property-and-casualty (P&C) insurance leader replaced its outdated policy administration system with a third-party cloud solution, it needed a better way to determine exact property locations. Geolocation accuracy allows the insurer to view where policies are located, down to the parcel or building level, providing information such as their proximity to different kinds of risk. With this information, insurers are ready to generate more accurately priced policies. While adding this step to their internal processes, this information also needed to seamlessly integrate into the new policy administration system.
The insurer’s legacy geolocation software vendor was able to provide information at the parcel (lot boundary) level only about 50 percent of the time. Often the solution assigned a location only to the block or ZIP Code level. Without more precision, the insurer could either underprice a policy, which resulted in undue risk, or overprice policies, which might result in lost business. The insurance company needed its new policy administration system to incorporate highly precise location information. It also wanted to enrich its internal data with externally available data sources to support more accurate risk assessments.
The insurer had previously implemented the Precisely Spectrum products to improve data quality and enhance risk models for its actuarial group. When it needed to incorporate Location Intelligence into its pricing models, the company again turned to Precisely.
The P&C insurer rolled out the Spectrum Technology Platform to consolidate and validate data from its disparate internal systems. Now the solution determines specific geographic coordinates for each location and assigns each a unique identifier, known as a PreciselyID, that remains persistent with the address location even if the latitude/longitude coordinate moves or improves up to 50 feet.
This PreciselyID unlocks a wealth of information associated with each location (such as previous storm or flooding events), and because each PreciselyID is linked to specific geographic coordinates, all associated information is preserved over time, even if the policy or customer changes.