Caroline Elliott-Grey, senior product manager for the UK and Ireland at LexisNexis Risk Solutions, explains how brokers can utilise geospatial data to better serve clients amid fluctuating climate
What is geospatial intelligence data?
Geospatial data relates to locations on the earth’s surface. In the context of insurance, it’s the peril risks for a specific address – such as the risk of flood, subsidence and crime.
How is this data used?
Insurance providers can access a wide choice of geospatial intelligence data at the point of quote to support pricing accuracy and ensure that the product being offered to the customer is right for the risk.
Insurers can also choose to visualise this type of data in map form, to understand their exposures and accumulations and help identify policyholders who could be at risk in a weather event.
Increasingly, we are seeing insurance providers use geospatial intelligence data to help customers mitigate their own risks.
Smaller brokers don’t tend to need the deeper level of insight used by larger brokers, MGAs and insurers, so we now offer a package of perils data – called LexisNexis Geospatial Risks – which includes information relating to flood, subsidence, crime and the property characteristics for the address, such as the roof type, number of bedrooms and construction type, for example.
Why is geospatial intelligence data becoming so important for brokers?
Insurance professionals must expect the unexpected when it comes to the UK climate.
Environmental risks are increasing, with the total value of weather related property claims amounting to £573m, according to April 2024 figures from the ABI.
If we look at the issue of subsidence, our analysis of British Geological Survey data found that with the current climate trajectory, approximately 1.2 million more homes in England are at risk of subsidence issues by 2050. This is a 27% increase on the estimated 4.5 million households already at subsidence risk today.
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We all remember the 2022 heatwave that pushed temperatures past 40°C for the first time. This resulted in the equivalent of one new subsidence claim made every 15 minutes in the second half of the year.
A broker tasked with securing competitive home insurance quotes will need to have a good knowledge of the risk upfront – not just for the individual, but for the perils risks of the property too. This is why geospatial intelligence data is being used more and more by brokers in risk assessment.
With more information about perils risks, brokers can personalise cover and quotes, help mitigate risks for their customers and create greater loyalty. This insight also means they can explain to their customers some of the property characteristics and environmental factors that influence insurance decisions.
Are brokers under pressure to assess property risks more fully for their insurance partners?
Yes and it is understandable given the way our climate is changing.
How can geospatial data work from a customer engagement and risk mitigation perspective?
Fundamentally, this data allows brokers to do more of what they do best – be a valued advisor to customers.
Imagine a broker is aware that a customer is in an area prone to subsidence, for example. In that case, they may wish to provide some tips on how to spot the signs of subsidence early, or they might want to point out how trees located close to the property could exacerbate the problem.
More insight means more opportunity to connect, engage and support customers as we face increasing climate threats.
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