February 2011 – Insurance is an industry built around the understanding of risks. The ability to analyze the history of loss incidents and estimate the probability of future losses is the key to identifying what prospects to approach, what risks to underwrite, how to rate and price policies, and how to organize and prepare for claims service.
For many types of insurance, location is a major factor in determining exposure to various kinds of weather and non-weather related risks. For example, in order to properly rate and price a particular property, the insurer should know the location of the nearest fire station, the proximity to a fault line or flood plain, the nature of crime in the area, whether any potential terrorist targets are nearby, the existence of abandoned coal mines, and many other critical pieces of information about location based perils.
Over the past decade, the amount of external risk data available has increased exponentially � and has become more broadly available. Coupled with the explosion of new analytical tools and services, the use of external risk data is becoming a key competitive differentiator.
A new survey is underway to better assess the insurance industry’s use of external risk data � including specific results for Canada. The survey covers a wide range of exposures � including flood, wind, hail, wildfire, crime, and many more. This study will address the following questions:
- What are the business drivers, lines of business, and key business areas for the use of external risk data?
- Which specific types of external risk data are used (e.g. flood, hail, earthquake)?
- Where is each specific type of external risk data used (e.g. actuarial, underwriting, claims)?
- What is the business value provided by each type of external risk data?
- Who are the key providers of external risk data and how is the data acquired?
This survey is being conducted by Strategy Meets Action (SMA) in partnership with Tech Decisions, and is sponsored by Pitney Bowes Business Insight. The results of the research study will be presented in a Tech Decisions webinar on Feb. 23, “Gaining a Competitive Edge through New Risk Data and Tools.” To participate in the survey, click here. The survey will ask which geographic area you are representing so that Canadian results can be produced. Completing the survey will automatically register you for the webinar.
Strategy Meets Action (SMA) is a strategic advisory firm exclusively serving the insurance industry. SMA’s services are actionable, business-driven, and research-based � where strategy meets action � enabling insurers and IT solution providers to achieve business success. For more information, contact Mark Breading at [email protected]