Insurance companies have known the power of geocoding for years. By finding associated geographic coordinates among other geographic data, providers have been able to better and more reliably evaluate risks to portfolios and properties. Now, location intelligence is becoming foundational to business development and marketing alike.
That means that geocoding – and reverse geocoding – have come back into the spotlight. Here are three reasons insurance companies need geocoding more than ever:
Thanks to the age of instant communication, the world has become flatter. Insurance providers can compete on a global scale, which has raised the bar for competition and drastically diversified portfolios. If a UK provider is consulting with a client about building a factory in Asia, geocoding is imperative in determining the viability of different areas, from demographics to socioeconomics and environmental variables.
To compete internationally, insurance companies must become internationally knowledgeable about properties. Re-insurance provider AON Benfield, for example, has recently enhanced location intelligence initiatives with deeper, more centralized geocoding that translates common reference points, such as customer addresses, into accurate locations that provide consistent intelligence across international geographies. More accurate geocoding helps improve the accuracy of AON’s catastrophe models and allows the business to better understand their clients’ risk exposure.
2. Climate Change
In October 2013, the UK was hit with the biggest storm of the past 25 year followed in December by successive storms and extensive flooding which continued into the New Year. In the Philippines, Typhoon Haiyan was one of the largest and most intense storms at landfall that was ever recorded. Storms are becoming a bigger factor in risk evaluations and insurance providers have sought more powerful location intelligence capabilities to keep pace.
Knowing a post code is no longer enough, because a coastal property and an inland property could still both have the same code. Comprehensive geocoding means knowing an individual property’s exact risk. With the right GIS platform, it’s possible to move beyond the analysis of post codes by integrating different sets of data and analyzing them as a whole.
Willis Re, for example, has been leveraging the power of geocoding to produce more accurate risk estimations when it comes to natural disasters. With clients in more than 150 countries, Willis Re knew it was crucial to pinpoint locations and assess risk at a granular level. By combining high-resolution geocoding with client data, the firm has been able to carry out cross-country comparisons and greatly simplify analyst workflows – in some cases, reducing workloads from eight hours to one hour.
3. Property Inspection
More detailed geocoding can offer data about a building’s individual attributes, rather than only showing information about the neighborhood. That means taking into account factors like structural integrity and a building’s footprint, offering data points such as energy consumption and other details that could have implications for investments.
With this information, insurance companies can determine what kind of risks the property can withstand with far greater accuracy. By integrating this information with climate forecasting and comprehensive data sets for global properties, providers can create much fuller pictures of risk than ever before, ensuring that a client’s investments are as sound as possible, wherever they’re located.
For more on how geocoding is becoming increasingly relevant for insurance and other industries, visit www.mapinfo.com for case studies and other resources.