Insurance companies struggle to sift through mounds of data to find the right information for particular situations in specific locations. Then they must have specialized expertise to analyze those data before they can be put to use. In this way, making better decisions based on information is an arduous undertaking that requires significant time and resources.
To help insurers harness the power of their data, Guy Carpenter & Company created i-aXs (pronounced eye-access), an online risk management platform. The tool uses geospatial technologies to provide insurers with immediate access to exposure data, as well as customizable imaging, tracking, analysis and reporting tools to make better business decisions from their desktops.
Diminishing Data Returns
Catastrophe modeling in the insurance sector gained momentum after Hurricane Andrew wreaked havoc in Florida in 1992. Rather than relying on best guesses, the industry embraced predictions that were based on historical data analyzed along with current conditions and related risk factors. While insurers' information did significantly improve, that improvement came with a cost. The data sets used to run these models continued to grow in size, and insurers were left straining to organize massive amounts of data for analysis.
Managing and organizing data were not the only issues facing insurers. Analyses of risk portfolios required highly skilled professionals, and even if insurers had a few such analysts on staff, they were often overworked, with a constant backlog of requests. Those firms that chose to outsource analysis also ran into bottlenecks and lost valuable time in securing the information they needed to make decisions. The entire process to run just one report frequently took days, if not weeks, to complete.
But what if the data could be assembled efficiently and their analysis performed in a timely manner? Improved efficiency and speed still would not solve all of the problems with this process. In the past, insurers received static reports that delivered information and results in one way. Too often, this meant that the analytical information was not presented in a way that was actually useful to clients. The basics were there, but not necessarily in the right format for ready use.
In response to these obstacles, Guy Carpenter developed a system to help clients streamline data management, bypass data analysis bottlenecks and customize their own analytical reports. The result is i-aXs, a risk management platform that allows users to produce customizable reports, complete with mapping, in seconds.
i-aXs stores and organizes an insurance client's extensive data repository. When a report is needed, the client's users can simply log on to i-aXs to identify the specific information they need, run a report and view the results in a format that is appropriate for their individual purposes. Instead of being stuck with a single static report, they can define their own customized outputs by modifying parameters of analyses within a data set. Moreover, users can save reports that they have run before so they can run them again when newly acquired data are uploaded into the system.
Insurers are able to understand what it would mean to their overall risk portfolio if they took on coverage for a specific property. They can run reports themselves to determine how changes to their portfolios would affect the cost of capital and their reinsurance needs. i-aXs can handle such complicated queries by comparing the client's data to other data sources, such as proximity to a terrorism target or the likelihood of a natural disaster.
For example, i-aXs can lay a satellite image of a historical hurricane track over a company's exposure map to predict total insurance values, the possible number of claims that could potentially result and how such a scenario would change reinsurance requirements. Any i-aXs user can do this - from the CEO to the newest underwriter on staff.
i-aXs also provides this information very quickly after an event occurs to help insurers know what damage they have incurred. When Hurricane Katrina devastated New Orleans and surrounding areas, Guy Carpenter used an early version of i-aXs to provide a client with information on its losses. A satellite image of properties after the flood was imposed on an image of the area beforehand to pinpoint which buildings were flooded - weeks before the client was able to enter the area to assess its losses in person. With i-aXs, companies can quickly generate and distribute this type of information to claims adjusters, who can then be deployed immediately after an event.
Location, Location, Location
Since location is crucial to the insurance business, it is a key element in the i-aXs design. Integrated mapping and satellite imagery are built into the platform, allowing clients to understand data in relation to location. i-aXs uses geospatial technology from two vendors to provide its location intelligence.
i-aXs uses Oracle Spatial to store, organize and manage spatial data, as well as to provide sophisticated analytics. The technology allows i-aXs to integrate years of risk analysis, catastrophe modeling results and current data, and put this information on a map. Oracle Spatial, including its vector and georaster services, allows i-aXs to show how data are related to locations using satellite imagery that is updated regularly.
i-aXs' Gradient Analysis tool highlights the marginal impact of losses to a portfolio at a specific risk level and by geographic area. High exposure concentrations are shaded on a map, in comparison to lighter-shaded areas where insurers may add business without negatively affecting their portfolios. Insurers can use the tool to pinpoint locations that are ripe with new growth opportunities and to identify areas where they may want to reduce current business.
We expect Oracle Spatial will continue to enhance i-aXs' data organization capabilities as the system is used increasingly to address risk management at the enterprise level. In recognition of Guy Carpenter's outstanding use of geospatial technology to advance enterprise solutions, in 2006 Oracle named Guy Carpenter the winner of The Oracle Spatial Excellence Innovator Award.
Visualizing Risk in the Big Picture
With Oracle Spatial, i-aXs stores and organizes data and relates them to areas on a satellite map. However, insurance policies deal with addresses and boundaries, so i-aXs relies on technology and data from Pitney Bowes MapInfo to effectively incorporate this dimension of location into its analyses and reports. Through MapInfo's geocoding capabilities and global data technology, i-aXs can identify boundaries and specific addresses on a map and then incorporate this information into analysis.
Additionally, MapInfo allows i-aXs users to analyze and visualize their portfolio exposures and losses at specific addresses and within bounded areas. Guy Carpenter clients wanting to determine their catastrophe exposure in certain places can instantly see where their policies are located on a map. i-aXs users can easily generate a variety of reports based on these maps. This process also works in reverse: Maps can be generated based on users' reports.
Recognizing i-aXs' innovative use of its mapping technology and location intelligence with easy-to-use interface, MapInfo presented Guy Carpenter with its 2007 Meridian Award for Organizational Impact using location intelligence.
Modeling alone cannot provide the full picture of risk exposure. In fact, without mapping and geospatial technology, it cannot offer much of a picture at all, and it frequently leaves insurers with a series of numbers, charts and graphs that may seem unrelated to their functioning business. Technologies such as those provided by Oracle and MapInfo are used in i-aXs to help insurers understand how modeling applies to their business in various locations. The platform provides a competitive edge to insurers by allowing them to be proactive in managing their portfolios and to make better, faster decisions in their underwriting strategies.