How Underwriters are using Location Intelligence in Insurance Risk Management - Alex MacKay, CEO

The future success of Location Intelligence equals how quickly it offers vertical industry applications. It must explode away from the traditional GIS world which has unfortunately been too much of a back room operation and not integrated into the key operations of corporations. Earlier this week, a few of us DMTI folk were talking with Natasha Leger, Editor of LBx Journal and we spent the better part of an hour talking about just this point. As we were comparing notes with Natasha about what really drives Location Intelligence success, we were in sync that its really about the business applications of Location Intelligence within actual business processes that counts. Its about the payback. And that verticalization of the business applications is where the real success of Location Intelligence lies.

Take insurance underwriting as a great example. It's one of the real hotbeds of LI. Understanding where a property is in relation to risk elements is a key decision affecting an insurance carrier's profitability. Using LI is a simple solution to a complex, real-world problem for the insurance industry. Insurers depend on geographic and demographic information to assess underwriting risk, handle claims, match coverage, expand markets, serve existing customers and develop new business.

What complicates matters? The sheer volume of data - claims histories, natural and man-made hazards, risk factors, and the competition. Storing, retrieving, interpreting, and applying all of this data in a meaningful way can be a staggering and expensive proposition.

Location-based technology has become an invaluable strategic tool to many leading insurers. Mapping allows insurance professions to quickly access information, recognize patterns and trends, and drill down into data for detailed analysis and sound decision-making.

Insurance companies can realize the most immediate benefits in productivity and efficiency in the discipline most driven by complex data - underwriting. With Location Intelligence solutions commercial underwriters can quickly assess risk for any given address.

Address cleaning and geo-coding are the essential beginnings of the policy lifecycle. They provide instand location validation and correction to ensure "clean" data. They also assign precise geographic coordinates, which are used later in other applications such as underwriting, claims, call-centers and marketing.

Due to the fact that addresses can be accurately identified on a map, underwriters can assess risk and set premiums in ways that may otherwise have been difficult.

When you net it out, a ton of insurance business process is about assessing the risk of a property. In simple terms, what is a property? It's the heart of Location Intelligence to know as much information to assess a property as possible.

LBx Journal has a great idea about creating Industry Forums and we have advised them we think it's a winner!

Making the Right Rating Decision More Quickly is a Competitive Advantage to the Insurance Industry - Billy Ormerod, Insurance Account Executive

In the Insurance industry, portfolio development, with the optimal goal of increasing profits for a healthy combined ratio and advanced underwriting is a key component to increasing revenues. Reduction of claims through risk management and fraud mitigation increase your profit by reducing costs. A crucial component in these activities focuses on the actual policies issued. If rated too low or too high, these policies can mean either inadequate funds to pay out claims or the potential of losing business to competitors respectively. Location Intelligence can represent significant gains for insurance companies by improving processes, enhancing competitiveness through customer satisfaction, refining underwriting and ultimately improving your loss ratio. Due to the adoption of Location Intelligence one major Canadian organization saw a 31% improvement in address matching against property valuation models and consequently reduced the need for more costly manual underwriting while at the same time enhancing its decision-making and risk management. So how can Underwriters, Agents, Brokers and Vice Presidents of Property Lines use Location Intelligence to make dramatically better business decisions?

Visit our blog next week as we explain why Underwriters have found Location Intelligence to be the new competitive advantage.

Why is Location Intelligence so important to the Insurance Industry? - Christine Gemmell, Director of Demand Generation

In the first week of the blog Alex MacKay, our CEO talked about an executive roundtable luncheon with Senior Executives from leading Canadian organizations that was held during our user conference, Expedition 2010. One of the discussion points centered around whether Location Intelligence was mainstream. As it turns out, it really varies based on industry and business function. However, in insurance for example Jim Carroll advised us that location is on the agenda of the top 25 insurance companies in the world. So why do these organizations find this topic so interesting? Here’s the top 6 reasons insurance companies need to know about Location Intelligence…

1. Create Advanced Accumulation Rules – improve property underwriting accuracy and quality with real time accumulation knowledge to reveal exposure with accurately located recision address authentication

2. Reduce Claims Exposure and Detect Fraud – utilizing address and proximity data to identify patterns and opportunities will immediately improve decision making regarding new and existing risk exposures

3. Increase Automated Decisions – having the whole picture will help Underwriters reduce the need for pre-loss inspections to assess risk exposure, right from their desktop

4. Visualize Your Book of Business – having the right data and analysis tools will increase an Underwriter’s capacity for identifying migration, risk, growth and retention opportunities

5. Manage Re-insurance Treaties – utilizing accumulation and exposure knowledge derived from Location Intelligence

6. Improve Take Up Rates and Decline Ratios – through the utilization of advanced pre-screening tools that know positive and negative property risk factors, Underwriters and Brokers can speed up decision cycles with confidence

All of these applications can represent significant gains for insurance companies. Savings realized by improved processes, competitiveness through customer satisfaction and improved underwriting and loss ratio.

Location is the New Intelligence: Jim Carroll, Futurist, Trends and Innovations

A few weeks ago at DMTI's customer conference our keynote speaker Jim Carroll gave the crowd his view on Location Intelligence......here's a re-post of his blog on the subject. What do you think, is Location the new intelligence?

Location is the new intelligence
April 28th, 2010

It’s big, and its’ getting bigger!

That’s the location intelligence industry, which is resulting from the rapid dominance of location-aware mobile devices, the rapid emergence of massive sources of spatial (geographic oriented information, i.e. Google Maps), the rapid user adoption of location-based applications (i.e. iPhone Apps), and a significant amount of innovative thinking as to how to capitalize on these very fast paced trends.

There’s a lot of people building a lot of new businesses around these trends. And it’s happening extremely quickly:

•in a just-announced test of location based advertising in Finland, MacDonalds’ has reported that location-relevant mobile ads resulted in a 7.0% click-through rate. Of those who clicked through, 39% then used the click-to-navigate option to find the closest restaurant. These are significant numbers

•one if 4 American’s uses location based mobile services, and half of those who noticed an ad while using such services too some action

•there has been a 68% increase in the use of mobile mapping and direction services in Europe in ONE YEAR according to comScore

•MarketResearch.com predicts increases of 37% compound annual growth for mobile advertising and 65% for mobile commerce, influenced by the speed of adoption of location-based services

•Juniper Research suggests that location based service revenues will top $12.7 billion by 2014, up from $3 billion last year

•another survey by RCNOS suggested that the mobile locations technologies market will grow at annual compound rates of 20%, reaching $70 billion by 2013, which includes both consumer and business intelligence/application (survey, mapping etc) applications

•it’s estimated that 1 billion people will access social networks by 2014. Most of them will use some form of location based application as they do so.

•GPS-enabled mobile phone devices will dominate the technology space, comprising 66% of all GPS devices by 2013

This is pretty significant stuff. Actually, its more than significant – it’s huge. Location is set to lead to significant industry transformation; some pretty dramatic business model disruption (think real estate); changes in consumer behaviour (product promotion and uplift); new business models (mobile, text message based banking which starts out via a proximity relationship.). There’s a huge amount of velocity out there!

There are two angles to the emerging market: consumer (i.e. iPhone) driven applications which will involve marketing, branding, product promotion, customer loyalty, point-of-purchase and a huge variety of other opportunities. The second involves corporate applications such as risk-minimization (i.e. mortgage risk analysis based on spatial data).

Regardless of how you look at, the overall impact of location intelligence is going to be dramatic.

Last week, I did a keynote for DMTI Spatial, a leader in this emerging space, particularly in the corporate application world. He has an interesting blog post that summarizes some of the unique issues that go with this fast emerging trend.

Location is the new intelligence. And its’ happening faster than you think!

And an increasing number of my keynotes and clients are asking me to focus upon the business opportunities that are emerging in this world. Stay tuned.

Jim Carroll, Futurist, Trends and Innovations Keynote Speaker