Enterprise geospatial solutions require integrated software and data applications that can be easily deployed via the Web. Enterprise-wide, geospatial solutions are location intelligence derived from the precise position of a point in relation to other relevant spatial entities such as insurance risk (e.g., brushfire, storm surge, earthquake fault), tax jurisdictions, customers, competitors, suppliers, or sales potential).
As location intelligence is integrated into more enterprise business solutions, the adoption of many location-specific applications will be limited without improved positional accuracy. Many solutions promise roof-top geocoding but the positional accuracy is interpolated along the street face. An enterprise location solution requires all of the following for complete geospatial intelligence:
- Point-precise geocoding accuracy;
- Supporting GIS databases that are correct in terms of both spatial position and data attributes; and
- The technology for spatial processing and business rules.
This article is focused on enterprise-embedded risk applications for insurance companies. In subsequent installments, we will focus on specific risks such as brushfire, wildland/urban interface, and storm surge, as well as tax, retailing, consumer LBS, and other applied geocoding-database solutions.
The massive wind and storm surge damage from Hurricanes Katrina and Rita and recent brushfires in Texas and Oklahoma highlight the environmental risks faced by insurance companies. The risk for any given address is a function of its location relative to potential environmental hazards. An address in the middle of a concrete and asphalt city faces almost no brushfire risk while those at the edge are more vulnerable. Houses built near hurricane prone coasts face water and wind risk as a function of elevation and distance to the coast.
Insurance companies have to model risk for underwriting analysis. Insurance companies are increasingly turning to enterprise geo-spatial solutions seamlessly embedded within the organization. The solution includes the tools to:
- Provide high-level spatial accuracy for each individual address geocode;
- Access spatially precise GIS layers for specific risks such as brushfire or coastline;
- Assign a risk score from an actuarial model based on past losses and damage footprints; and
- Implement business rules to apply the correct premium price based on the rating territories derived from risk analysis.