Insurance companies can gain from location intelligence by tapping into risk analysis of different types of risk claims. Increased usage of location intelligence can be crucial for an insurance company’s digital transformation path. Location intelligence solutions have potential applications across a range of insurance processes, including marketing, distribution, pricing, underwriting, loss mitigation, claims, fraud management, and the provision of value-added services to policyholders, through the usage of good mapping tools or even effective decision-making using geospatial insights.

Here are some of the ways insurance companies benefit from location intelligence:

Risk Analysis

The insurance sector can make use of different point of interest data for risk analysis, especially to identify the proximity of a business to dangerous areas, such as flood zones or wildfires. This can not only help to limit risk and based on the risk levels and capabilities of a business, insurance companies can analyze the amount to be charged as premium.

Therefore, with accurate location data it is possible to measure both the environmental and commercial factors of a particular location that can be contributory factors to an insurer’s final policy dispensing decisions. Conducting proximity analysis to identify nearby places or the lack of a particular facility that may pose additional risk to a business, property or individual is an added benefit of spatial analysis too. Understanding adjacency and exposure i.e. knowing what types of businesses or facilities are in close proximity to the property or individual being insured might help get better deals on a policy.

Target Potential Customers using focused marketing strategies

Every insurance company’s holistic marketing plan must include an effective consumer targeting campaign. Data is analyzed to gain a better understanding of prospective customers. By focusing on high-value prospects, targeting allows insurers to focus messaging on a portion of the general public, enhancing the performance of marketing strategies and the ROI of marketing spend.

Insurers can look into potential consumers living in specific neighborhoods and use data analytics to evaluate a person’s likelihood of owning a home and purchasing various insurance policies. In the case of present homeowners, insurers can assess their entire house worth and housing type in order to recommend an insurance plan that is tailored to their specific requirements.

The insurer may obtain an indication of how much a possible buyer is prepared to spend on an insurance plan by looking into their net worth, which saves them time and effort during the scouting process.

Fraud Detection

Insurance companies can use location analytics to track down false claims. According to a Financial Express article in 2020, the Indian insurance industry loses about 6.5 billion dollars per year due to fraudulent claims, frequently due to a failure to distinguish between legitimate and potentially fraudulent claims. To counteract this problem, data mining is used to assist adjusters in identifying claims that are most likely to be fraudulent.

Manually handling fraud claims can be an expensive affair for insurance firms. But with better data evaluation, the chances of fraud typically reduces. Insurers can uncover trends in historical claims data using data mining techniques, indicating which claims are likely to be fraudulent.

Policy Pricing based on risk analysis

Location intelligence can aid in the implementation of true local market pricing and justify higher insurance rate quotes in certain locations while drastically lowering prices in others. Location intelligence not only looks at pricing based on risk from an individual standpoint but also includes crucial geographical factors and therefore helps with pricing accordingly.

Insurers can protect more property owners and disperse out risk by offering cheaper or more varied policy options for medium- to low-risk clients.

At GeoIQ, we specialize in providing geospatial data and location intelligence services by collecting and collating data from various reliable sources to develop a better understanding of locations and make them available for businesses to use.

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