MapInfo Looks to Take the Risk Out of Insurance Policy Underwriting

By Joe Francica

A Review of MapInfo's Insurance Decision Solution Suite (IDSS)

MapInfo recently announced the introduction of their Insurance Decision Solution Suite (IDSS), a mapping and risk management solution for the insurance industry. Directions Magazine Editor-in-Chief spoke with Simon De La Hoyde, Strategic Market Manager, Telecoms, Insurance and Retail for MapInfo from his office in the UK, to determine the specifics of what the risks can be avoided in policy underwriting using spatial technology.

Joe Francica (JF): Can you give us a brief overview of IDSS?

Simon De La Hoyde (SDH): IDSS was built on MapInfo technology; built with third party data and the insurance carrier or reinsurers own data.To give a little bit of background, MapInfo has been successful in selling desktop system.MapInfo has taken away a lot of that complexity by using a web browser interface and many prescribed functions being customized and parented to the application without the user having to do that themselves.

So, it is a simple and quick and accurate and fast way for users to get access to information that maybe previously a lot of people within the insurer did not have access to, and although if they did want to, it would take them a long time to get it.

JF: The third party data you mentioned, is this from other data companies or specifically from an insurance industry resource?

SDH: There are three categories of data within IDSS.The third party data is specifically for risk event data; information about particular events, such as hail storms, wind storms, earthquakes, lightening strikes, tornados, things of this nature.Other meteorological information such as flood plain locations, the location of hazardous waste sites - things that have a bearing on the rating of a particular geographic area for the purposes of setting a premium...something that may be viewed as having a particular impact in a location, and the insurer, the underwriter or risk assessor will want to know about when looking at a particular geographical area. So that's one type of data.

The second is the insurers own live policy data, current policies; and the historical claims data.This can run to typically millions upon millions of records.The IDSS would extract that data from a legacy system into a new central spatial database with regular updates from the legacy system of the new records.And the IDSS runs off the new central spatial database.Inside the new central spatial database is also the third type of data, the GI data; the base mapping information.This can be street maps or wider area maps like counties (in the U.S.) or things like aerial photographs or digital elevation data with contours.

JF: Does the IDSS provide a scoring mechanism to assess the risk factors and how does the analysis proceed within the system?

SDH: What we have not done with the system yet is turn it into an application that necessarily has any particular algorithm or models that an actuary or underwriter would typically use.The way we have positioned the solution is that those type of scoring of data sets would be included as a layer within the geographical data sets included with IDSS.At least at this point in time, what the IDSS offers is the information up to and in front of the decision-maker; it is therefore an enabler; a decision support system.Now, we do see it evolving over time.

To explain for a moment on how the system is sold...the system is not an off-the-shelf, out of the box solutions.We have created somewhere between 60-70% of the functionality that is required and we offer a layer of professional services work to tailor and customize IDSS to individual customer's requirements. And there is where I see the potential for the scoring analysis to occur based on some rules and calculations that are specific to the insurer themselves.

JF: The insurance has perhaps one of the greatest opportunities to use GIS.Have you seen interest from all areas of the insurance enterprise, from marketing to operations as well as risk assessment and underwriting?

SDH: The IDSS is our approach to the actuary and risk management groups within the insurer.It has some benefit and therefore interest to the marketing group.We are seeing more and more interest and need within those group (that you mentioned) for GIS.They are beginning to see the light in terms of needing certain information at their fingertips; they know that the information is geographically-based, and although their end goal may not be to have a physical map on the screen, it is an intermediate point to getting where they need to go; report information on a given geographical area.A map is one of those outputs.

I think one of other areas you mentioned, on the operations side, is one of the areas we have been strongly pushing in other parts of our business moreso, such as in the enablement of mobile field groups - loss adjusters and inspection engineers.The ability to minimize the lost time and more efficiently schedule and route those people in the field to their next job location and work order.Therefore, what we have done in a different part of our business, which is termed location-based services group; we have built business applications that fit on PDAs devices to wirelessly enable and integrate with scheduling system of the insurers and the operational side of the insurers business.To be able to provide the loss adjuster with an optimize route of locations that they need to go to carry out site visits for on a given day and the ability to dynamically change those site visits base on a new customer's claim coming into the system.And for very simplistic things like problems on the road system like accidents and other factors that would delay an inspection engineer or loss adjuster's journey time to a customer's site.

JF: You said you see this now?

SDH: I don't see this implemented now, but in a lot of ways we are trying to lay the foundations for that.We, as a company, have a lot of success in the consumer market, so this is primarily focused on the wireless carriers, Vodafone for example.The step towards business utilization of location is actually not that far away.We are plugging that message to insurance carriers.We've had positive feedback from them, but in a lot of ways it is still a little bit early and a lot of them want to see someone having done it already before they take leap of faith.

JF: I am interested in knowing when you feel the market will be ready for a solution such as this? I've following the insurance industry for some time and have wondered why we do not see more interest from this industry.

SDH: I'll give you an example from two major British insurance companies.What these companies have done is create requests for information. So they have spent time developing documentation of their needs and their requirements to put out into the marketplace to a selection of vendors and system integrators that very clearly states that their need is immediate. And just by the nature of looking at what they have written and how they have specified their needs, they are very clear in terms of what they want; they have really thought about it and they are very certain that this is something they need within their organization to help their business.

JF: Are these companies using any system today?

SDH: They are using desktop-based mapping.And that's small pockets of usage.In groups where there is no desktop mapping, they are doing this will no spatial knowledge whatsoever.And they are just doing tabular-based, postcode analysis that does not have any spatial processing or intelligence behind it.What this means is that those individuals are going to those that do have the desktop-based GIS applications that they know can give them the results that they wants because they have seen the maps.And it is like every other vertical industry in terms of their use of GIS.There are islands of expertise and these people become slaves to the business; they become the people that just create maps.

JF: Thank you Simon; we appreciate your time and insights into the insurance industry.

Published Thursday, October 23rd, 2003

Written by Joe Francica

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