The best technology solutions come from a mix of different perspectives, expertise and skill sets. At Send, we work with some of the most innovative companies in the market to deliver a holistic commercial underwriting solution that supports underwriters in writing business efficiently, and with the support of the tools and data they really need.
We want to showcase the expertise of some of these partners and highlight how they drive even greater benefits for our customers.
In this data partner spotlight, we shine a light on Addresscloud. Addresscloud has worked with us for over two years and provides access to highly accurate, rooftop-level address and property and perils data.
This data is essential for underwriters to understand exactly where their risk property is located and assess its risk exposure.
Here, Mark Varley, founder and CEO explains the geo-coding approach to address matching, why it is so much more accurate than using postcodes alone, and some of the implications of an inaccurate address.
“An address is in essence, a description of a location, and most of us think of our address in terms of how receive our post. Many postal services around the world assign postcodes to help sort the post into sensible batches for delivery and we are fortunate in the UK to have a very detailed postcode that typically groups less than 100 addresses at street level.
Geocoding is the process of taking that address and determining the geographic coordinates associated with it.
A particular property may have multiple addresses, generally these will be the same but sometimes they can be different which can be confusing e.g., ‘1 High Street’ and ‘Cosy Cottage, High Street’ could be two different representations of the same address. The two main sources of addresses in the UK are local authorities and the Royal Mail. The Ordnance Survey (OS) will be notified of a new address by the local authority and will survey the property and produce the associated coordinates – often referred to as the geocode.
The Peril with postcodes
Insurers typically consider postal addresses during the quotation process and assess levels of risk associated with the postcode before pricing the risk and generating a quote. This has been the process for decades and whole pricing models have been built on the collated address data generated from this exercise.
The problem is that postcodes are broad areas that could encompass a variety of different terrains. A property at one end of a street could sit right on the side of a flood plain, whereas one at the other end may be on a slight elevation, rendering it high and dry. Same postcode, but a much more attractive risk to any insurer.
As a consequence, there is a very real chance that insurers could be:
- Accepting risks that would otherwise be declined
- Declining acceptable risks
- Under-pricing poor risks
- Over-pricing good risks
All of these have a tangible impact on the insurer’s bottom-line and its ability to remain competitive and solvent in a challenging market.”
Zooming in on risk using geocodes
Insurers who can embed geocoding into their risk assessment and rating processes will have a better and more accurate view of risk and this can be used to gain competitive advantage.
As the OS has surveyed the individual property and assigned the code, we can be confident in gaining a much clearer, more accurate view of the risks on cover. This rooftop level view of a property is the gateway to understanding a greater level of detail of the risk including historic flooding in very specific area, topography, soil hazard and the potential for future subsidence/erosion, exposure to high winds, even local crime rates. All factors which have a tangible impact on the property exposure and pricing”.
So, there you have it, without a geocode, insurers are at high risk of operating a book on inaccurate data, which has massive consequences for future modelling and solvency adequacy.
We use automated data services like Addresscloud at various points in the submission cycle. We have a growing number of data services including DnB, Companies House, CAPIQ, Accuity, CSL, Dow Jones, WorldCheck, Google, Lexus Nexus, Precisely, Ideal PostCodes and Melissa. Connecting API-enabled data services is straightforward via Send Connect.
You can find out more about our data partners here.