InsurTech: How SaaS Can Help Insurers Suss Out Property Risk

This article takes a look at how Software As A Service can really help insurers understand the ever-increasing amounts of data that surround the property market.

By Richie Toomey, Head of Analytics GIS, LexisNexis Risk Solutions

Over the past few years, cloud based hosting has become ‘the norm’ for many of us – feeding our ‘on demand’ lifestyles to deliver our music, photos, emails, calendars in an instant, whenever, wherever and through whatever device we want them.

This ability to remotely host data also has immense benefits in the business world, not least in insurance, which has seen a significant increase in access to data and analytics to understand risk.  Data enrichment at point of quote is now standard practice across the sector with the vast majority of the motor market now accessing the LexisNexis® Risk Solutions No Claims Discount module for more accurate NCD validation at point of quote.

But perhaps the area of the industry seeing the biggest efficiency gains and improved transparency through remote hosting and multi-dimensional applications is the home and commercial property insurance market.

This corner of the market needs to analyse and aggregate complex data about properties, perils risks such as fire, flood and subsidence, along with policyholders and records of past claims.  They need to understand policy accumulations, where live quotations exist across their entire book of business in real time, in a graphical form, right down to building outline level not just address.  Bringing these data sets together to build a picture of risk both at a single building outline view then pulling the focus right out to understand exposures across an entire portfolio is only made possible through remote hosting technologies and multi-dimensional applications.

Data analysation and visualisation supported by multi-dimensional applications in a SaaS environment enabling home or commercial property underwriters to detect or extract useful information from complex data, with ease.  This puts them in a far stronger position to determine the risks and make informed underwriting decisions based on this geo-spatial information.  It is this real-time understanding of risk given the influence of weather and fire spread on property claims that makes the real difference.  Many in the sector would have noted a spike in construction site fires reported[i] at the start of the year and also the record surge in subsidence claims after the 2018 summer heatwave we experienced[ii].

summer 2018 subsidence claims on houses

It’s little wonder that in a 2016 study, 85% of insurers said that software-as-a-service technology (SaaS) core applications have had a positive impact on their business by improving service quality, response time and availability post-deployment.[iii]

SaaS-based applications also allow insurance providers to keep all of their data in one easily accessible location and format. This means they can take a standardised approach to risk selection and easily adapt to changing market conditions, consumer demand and regulation. With enhanced visibility and insight into property risks, enabling more sophisticated risk selection, property insurance providers can better manage their underwriting performance and profitability.

THERE’S MORE TO LOCATION DATA THAN CHECKING OUT GOOGLE MAPS 

A good example of this type of application is the SaaS visualisation element of the LexisNexis® Map View product.  This allows the insurance provider to accurately assess risk for individual properties at a highly granular level based on the outline of the building – bringing all the information required to make sound underwriting decisions in one place.

There’s little doubt that data visualisation tools combined with remote hosting technology can be invaluable to both home and commercial property insurance providers.  However, selecting the right platform is vital to ensure the technology is maximised to its potential and a ROI is delivered. Flexibility is key – they must offer the ability to add additional data sources in the future, and analyse the resulting information in the most convenient and meaningful way.  Only then can sound decisions be made that may deliver the right results for property insurance providers.

[i] https https://www.constructionnews.co.uk/best-practice/health-and-safety/cn-investigates-the-43-rise-in-deliberately-caused-site-fires

[ii] https://www.abi.org.uk/news/news-articles/2018/subsidence-claims-quadruple-to-highest-level-in-more-than-a-decade/

[iii] Novarica’s Research Council study ‘Cloud/SAAS In Insurance Core Applications’, published April 2016. http://novarica.com/core-insurance-system-cloud-report/

 

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