Geospatial data can be the claims professional’s ally in managing property claims

Caroline Elliott-Grey 
Product manager, LexisNexis Risk Solutions, Insurance, UK and Ireland 

Geospatial data intelligence is growing in response to the increasing risks the insurance market and its customers are facing

There is little denying that environmental risks are changing—whether weather related or new trends in criminality. Climate change is putting fresh demands on claims professionals to better manage rising perils such as subsidence and flood.

At the same time, the property insurance market is keenly aware of recent changes in crime trends and need to understand whether the pandemic-induced blips are here for the long term.

Geospatial data intelligence using predictive models, scores and indicators can be the claims professional’s ally in understanding, managing and mitigating environmental claims, and this data intelligence is growing in response to the increasing risks the market and its customers are facing.

One such example is basements. In 2021, claims in excess of £1 million per property due to basement flooding were not uncommon. In London, basement flooding is a particular problem given more than 5000 new basements have been excavated in the last 10 years alone and the lack of surface permeability means that flash flooding is becoming a regular occurrence.

In response, insurance professionals can now access basement indicators not just at quote but during the lifetime of a policy. When combined with live flood data updated every 15 minutes, it can tell claims teams which policyholders need to be alerted to the risk of a basement flood and help plan resources to help expedite claims.

Basements can also give rise to subsidence issues for the property and potentially those surrounding it, providing further reason for claims professionals to exploit newly available data on the presence of basements.

The subsidence risk trees pose to properties is already well understood. In fact, trees are implicated in 70% of reports of subsidence and heave on clay soil, making knowledge of their location and height vital with these types of claims on the rise.

In a weather event such as a windstorm, insurance providers can also use geospatial intelligence to pinpoint the exact location of trees in relation to an insured property to assist with claims management or help mitigate the risk of damage caused by a tree falling. 

Finally, as the insurance sector transitions from the respond to recover phase of COVID-19, claims professionals along with their insurance pricing colleagues will be considering whether the crime-related claims of the past two years were anomalies or the start of longer-term trends.

The past two ‘pandemic’ years saw reductions in many types of acquisitive crimes, including burglaries, and increases in other crimes such as arson. As yet, we have not seen a return to pre-pandemic levels for many crime types, although there are regional differences.

The insurance sector has always looked at past claims experience to help predict future losses, but now that we have the vantage point of being two years on from the second national lockdown in November 2020, we see that that relying on claims data alone could be misleading.

Fundamentally, the short-term ‘lockdown’ crime trends need to be distinguished from longer-term changes in risk. This is where a score-based approach to risk assessment utilising crime data for a 10-year period can help smooth out crime-trend anomalies.

Making sense of these crime trends from an insurance perspective is key to fair and competitive pricing, as well as limiting the market’s exposure to fraud. For example, if an arson claim is lodged for a postcode that is scored as a high risk, that claim could be expedited while a burglary in a lower risk postcode may need further investigation.

By leveraging a decade or more of historic crime data that is refreshed on a constant basis, insurance providers can build the most current picture of potential local crime risk.

The power of these basement, trees, live flood and crime datasets grows when viewed alongside policyholder data, claims data, perils and granular property characteristics data down to the individual address, offering the potential for a 360-degree view of risk.

One gateway to this vast range of data makes it easy for insurance professionals to inject this data where it’s needed throughout the customer journey and to support claims.

Image sources: Canva and LexisNexis Risk Solutions

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