Why Property Intelligence Analyzes Risk
Sep 2022
How can a property intelligence and risk management platform help P&C insurance underwriters analyze risk throughout the policy lifecycle?
Sep 2022
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Since this post was originally published, Betterview was acquired by Nearmap. References to Betterview, the company, or its products have been maintained for historical accuracy. Betterview is now the primary solution for the insurance industry at Nearmap.
In our last blog post, we posed a significant question: what is property intelligence? Though the term carries many meanings, it can be generally understood as any and all information relevant to determining a property’s level of risk. This could refer to big-picture data such as regional weather patterns, or insights specific to a single structure such as a numerical roof score. A particularly useful form of property intelligence for the modern P&C insurer includes geospatial imagery augmented with artificial intelligence and computer vision. This type of property intelligence is prominently featured on the Betterview platform and will take center stage as we discuss how insurers can use it to analyze risk.
ANALYZING RISK
Risk analysis refers to all of the ways in which insurers identify real risk drivers on a property and determine to what degree they contribute to overall risk. This process strengthens every moment of the policy lifecycle. Quotes are more accurate, underwriting is more efficient, and loss control becomes more effective when insurers genuinely understand risk. Traditionally, insurers have used a combination of imagery, inspections, and actuarial data to inform this understanding. Property intelligence augments these methods of risk analysis while also adding new tools.
First, property intelligence tools powered by AI can spotlight risk drivers that escape the naked eye or are missed during a physical inspection. Starting with high-quality geospatial imagery (read here to learn why Betterview believes aerial imagery is the right choice), computer vision models detect instances of tree overhang, defensible space, missing shingles, and dozens of other possible property attributes. Particularly helpful are attributes related to roof condition; upwards of 40% of loss dollars are paid out for roof-related claims, and roof condition is a strong indicator of overall property condition. Whereas physical inspections often struggle to account for roof condition, a property intelligence platform can tell you everything you need to know about every roof in your book.
Second, property intelligence can take these detections and produce additional insights from them – insights relevant to an insurer’s specific business needs. This is how property intelligence goes beyond mere risk identification and enters the domain of risk analysis. For example, say an insurer is writing policies in a region with a high risk of wildfire activity. They are particularly interested in those attributes which contribute to overall wildfire risk, such as the state of defensible space. A property intelligence platform can identify how much defensible space surrounds every property. Then, this information can be combined with other detections such as roof material, condition, and age. The different detections can be weighed and scored, resulting in a comprehensive, actionable analysis of specific wildfire risk.
ANALYZING RISK THROUGHOUT THE POLICY LIFECYCLE
When you use property intelligence tools to move from risk identification to risk analysis, you can optimize every stage of the policy lifecycle for both accuracy and efficiency. Here is a quick snapshot of what this looks like:
- Underwriting: Armed with risk analysis tools, underwriters are transformed into insurance heroes – they are empowered to price risk more accurately, reducing premium leakage and improving loss ratios. The automations enabled by these tools also allow them to speed through formerly tedious processes.
- CAT Response: A better risk analysis means that insurers are set up to succeed in responding to and managing catastrophic weather events. They can analyze a property for specific hazards such as wildfire or hurricanes and allocate budgets and resources accordingly.
- Policy Renewal: Risk analysis is not just for new business. As properties change over time, a property intelligence platform can analyze the overall risk and supplement – or even replace – costly physical inspections.
Risk analysis is one of the critical functions of property intelligence for P&C insurers. Beyond just identifying individual risk drivers, a strong property intelligence platform can weigh and evaluate the contributions of these attributes to overall risk. The next step, of course, is to take immediate, strategic policy action based on these analyses. In our next post, we will discuss how this analysis leads to the next function of property intelligence: scoring risk.