ICTA Nomination: Intact Puts Risks in Their (Proper) Place

2015 ICTA Nomination.   Technology by DMTI Spatial.

Intact Financial approached DMTI Spatial for assistance in building a real-time application that would allow their team of 1,200 underwriters to better understand the risks presented by existing and new policies during the underwriting process. This application was designed to integrate into the legacy underwriting systems and processes. Leveraging secure cloud-based services the application provides real-time assessments of risk accumulation and flood risks based on the location of current and potential customers.

The project was broken into two distinct phases. Phase one included data readiness and the building of core tools required to serve up data for the geospatial application. The first step included the cleansing of all addresses on existing policies and automating the process of correcting them at the point of entry to ensure that prospective policy addresses are complete and accurate. The addresses were then Geocoded (spatially enabled) to bind policy address data to geographical locations. Geocoding information is then used by underwriters to differentiate the various risks based on the location and determined the most appropriate premiums based on the characteristics of the risks. New quotes and active policies could, for the first time, be grouped to highlight concentration risks in a table form. Underwriters can also select a specific radius around a property to analyze. This function allows underwriters to view all properties within that radius (either active policies or new quotes being considered) in a table format.

Phase two of the project encompassed the creation of a visualization tool and the addition of risk layers to highlight potential risks for consideration during the underwriting process. Intact and DMTI created a new mapping tool that provided a visual user interface within Intact legacy underwriting systems.

The new tool allows underwriters to display a property for which a quote has been requested as an icon on a map. The property is presented on a map, along with:

  • Street map data;
  • Intact existing risk layers: all addresses in relation to the in-focus address, and their associated underwriting information;
  • Flood zones: restricted, high medium, low and none and the associated depths for each zone;
  • Elevation and Proximity to Water data layer which allow underwriters to determine if the property sits above or below the level of the nearest water source;
  • Distance Tool: This tool allows the user to determine any distance on the map in relation to the property;
  • Zoom in and out capabilities.

By assigning spatial data to an address, underwriting information can be tied together across policies and quotes (by risk location). Underwriting information can then be generated, both from internal and external sources:

  • Internal: Building information, Total Insured Value (TIV) at the address, claims activity (both internal and external claims). Information can also be used in the rating services specific to location.
  • External: Flood zones as well as Elevation of the address can be determined based on spatial data. Any additional data layer that DMTI has available can be added in the future and displayed relative to Intact’s existing risk addresses.

The solution enables high accuracy through the use of Geocoding on all addresses. Geocoding enables increased granularity during the rating process, by providing both environmental factors as well as policy information at a spatial data level (X/Y coordinate), as opposed to a postal code or municipality level. This allows for much better segmentation during pricing and underwriting processes.

In summary, the solution offers the following business benefits:

  • Geocoding offers a uniform national tool to aid in underwriting. The real-time consolidation of internal and external data paints a truer picture of the landscape around Intact’s new and existing risk addresses.
  • Efficiency gains linked to underwriting, based on system automation of rates, deductibles and minimum premiums (all determined based on spatial data).
  • Economies of scale: the existing functional platform (including Geocoding and Geomapping) can be accessed across multiple applications.
  • Security: By making Application Program Interface calls based on X/Y coordinates to third party databases, no customer data leaves the Intact network, yet the application is able to leverage best in class third party data.
  • Speed: Because map tiles are pre-rendered before being streamed to the application, rendering of information in the application is extremely fast.

Efficiencies achieved during the quoting process resulted in a 15% reduction in processing time making the payback period for this project 6 months.

Some contributing factors for this reduction are:

  • The ease of entering addresses as well as the reduction of errors when entering risk addresses.
  • The Street map functionality quickly highlights concentration of risks in relation to environmental factors.

Better risk segmentation will lead to better risk selection by our underwriters and lower claims costs. This will positively impact Intact’s loss ratio as well as produce a policy premium that better reflects the customer’s exposure.

The entire underwriting community at Intact highly values the features associated with this new application.

As one of the underwriters told us, “Great tool and very visual. Really like it. It is easier to see if we are overlined or if it’s only because of the building being across the street. Love it!”

About Intact

Intact Financial Corporation is a provider of home, auto and business insurance. It insures more than five million individuals and businesses through its insurance subsidiaries. For more information, visit www.intact.ca.

Source: Intact Financial Corporation