There are several facets to property Insurance: some we can’t control but others we can. In this article I would like to concentrate on the elements we can control, or at least those we can make it easier to control. At LexisNexis Risk Solutions we have just finished the latest upgrade to our property risks and geospatial intelligence solution, LexisNexis® Map View. We believe it’s an important step in reducing that part of the property insurance workflow that we can’t control, getting more of the vital data into the point-of-quote.
Data and accuracy are key to controlling your risk. We know that some in the industry are still using outdated postcode files to assess property level flood risk and other perils at point-of-quote. This lack of accurate data and the use of manual underwriting analysis increase the risks, especially in this hardening market.
Having worked for over 20 years within the geospatial realm and the insurance industry, I am very proud of the work we’ve done at LexisNexis Risk Solutions. We have reached a unique position in the market, supporting insurance business in risk underwriting requiring detailed geospatial analysis right at the start of the quote journey.
This point-of-quote dimension is one of the new features we developed for our Map View solution. Its data and functionalities now feed into the LexisNexis® Informed Quotes (IQ) platform, our fully automated point-of-quote solution. But let’s take a step back for a moment, because that is just the beginning.
By connecting LexisNexis® Map View to our IQ platform, we are able to replicate property level risk practices in an automated quote stage. We can now run various accumulation calculations at the point-of-quote stage. Through the platform, an insurance provider can query if another insurer has any large accumulation risks within a certain distance of the property being quoted for. Or when the insurance provider may not want to write two large risks within the same building, IQ will flag that. It’s also possible to flag where the nearest water body is at the quote stage. And not just in a ‘pre-baked’ or ‘pre-filled’ way, but actually on the spot.
Building footprints in the point of quote environment
Property level address matching and appending scores to a location is nothing new and works perfectly for residential addresses. However, its less effective for larger properties and large commercial buildings. To address that, we created a solution for commercial and high net worth properties called Scoring by Building Footprint where we use the full building footprint to calculate the worst possible outcome in case of a flood event.
Let’s take an example where an underwriter is preparing a quote for a client and you click on the map at the address provided (see graphic below). Using the flood data available for that address, in a point-of-quote environment you will get a simple ‘clear’ score for flood. It wouldn’t overlay any flood data. Even if you quote a buffer of five or ten metres around that point, it still wouldn’t intersect with flood data. But if you overlay a building footprint, especially for large commercial edifices, you can see that roughly 30% of that building is in a high-risk flood zone. We can identify these insights now in Map View and within Informed Quotes.
To that, it’s possible to further layer on your own analysis too. Another new Map View functionality, the Elevation Profile, shows the difference in ground elevation between a selected property and its nearest water body. The interface is very neat and intuitive. You can move the cursor up and down the line between those two locations to assess whether there is a high risk of flood coming in the direction of the property. This function also provides a graphic which shows a cross section between the two points. It gives more insight into the potential of flooding and how far the flow of water will go between those points, so the insurance provider can decide if the risk is worth taking.
Map View Blocks also provide insights related to fire. This has been very efficient in helping users to accurately assess the risk of flames spreading between buildings. We are now using very detailed building footprint data, which allows the user to check the degree of separation between properties, further enhancing the ability to measure the risk of fire jumping from one to another.
This fire risk is also calculated in seconds in the quote environment, giving the insurer more precise estimated loss figures, something that would usually take hours or even days to do manually. Solutions such as the Map View Block Assessment yields greater precision than radius, allowing underwriters to write more business in urban areas where radius is known for overestimating risk.
Industry giving and taking to deliver new data layers
LexisNexis® Map View has over 10,000 users within the insurance industry, from underwriters, pricing analysts, marketing managers, risk managers, to loss adjusters, and the the list goes on. But the customers who get the best out of Map View today are the ones sharing policy claim and quote data with LexisNexis Risk Solutions. Why is this? Because the more data an insurance provider shares with us, the more analysis we can provide. Some of the unique insights those clients get include risk accumulation calculations, estimations on Estimated Maximum Loss and Probable Maximum Loss for fire accumulation, full portfolio analysis and identifying large exposures. All that becomes available in seconds.
Are the large exposures in areas that you should be worried about in your business? Are you insuring in areas likely to flood? Are they in defended areas? If they are, are the defended areas fit for purpose?
A popular feature among the users sharing their policy data is the Hotspot and advanced risk filtering. Hotspot is designed to monitor top accumulations, and whether they are on a single book of business, such as personal lines, or a multiple book of business, comprising personal lines and commercial. Hotspot allows an insurance provider to look at their top accumulations in various configured radiuses, identifying where they may have breached underwriting rules, or even where they still may have capacity to underwrite more business.
We see the Hotspot tool in Map View being a great help for reinsurance submissions and Solvency II reporting, saving a lot of time and labour for companies.
Hotspot will automatically monitor policy locations and identify clusters of high-risk areas that an underwriter should really worry about. The tool also allows to quickly zoom on these areas and export the underlying data and policy information for further analysis. In addition, it can be used to identify where an insurer may be overexposed in high-risk areas, or even areas known for historical flooding.
Filtering for policy query by value
Another important Map View enhancement is the risk filtering tool. It allows the user to query a policy data in a more proactive way. For instance, from the full risk portfolio, the user can select or query any policies or locations that have a total insured sum greater than, say, £1 million. Then, from that selection, it’s possible to reselect any policies that have a really high flood score. Therefore, you can quickly identify any large exposures that have a high risk of flooding. Again, this data can also be exported for further analysis.
There are many more ways to use this dynamic searching tool within Map View. It has multiple layers to assess flood risk of a property beyond its outline, including spatial layers from third parties, multiple or single layers of visualisation, JBA’s scores or even historical data for an insurance provider.
These new features in LexisNexis Map View can be used to help write better insurance business, especially in the automated quote environment, in e-trade products improving referrals, eligibility and strike rates. Our single point of entry enables our clients to confidently write more business online via their own distribution channels, freeing the technical underwriters to concentrate on the more complex risks. It frees them up to concentrate on what the business really wants to control, because they have a thorough view of the risks involved.
Follow the link to the LexisNexis Risk Solutions website to find out more about how we support insurance providers.