In this series of blog posts, we have defined three core functions of property intelligence: risk analysis, risk scoring, and risk management. One final function remains — the way that property intelligence monitors risk. Risk monitoring allows P&C insurers to remain up to date on current property condition, especially at time of renewal and claims. In this way, property intelligence once again improves loss ratios and drives down expenses, while simultaneously helping insurers to better serve their customers.
Risk analysis provides insurers with a comprehensive picture of real property risk. Risk scoring translates this analysis into streamlined, easy-to-use datapoints. Risk management transforms the preceding data into direct policy action. Risk monitoring, finally, places property intelligence into historical context to reveal how properties change over time, and how they may change in the future.
How is this risk monitoring process accomplished? One approach is to use an archive of historical imagery integrated directly into a property intelligence platform. Aerial imagery providers use low-flying aircrafts to photograph properties multiple times per year. In order to effectively monitor risk, your property intelligence platform should feature as many views of a property as possible – especially following a catastrophic weather event.
Underwriters and claims professionals can manually compare historical imagery to see how a property has changed over time. But they can much more effectively manage risk if they combine historical imagery with automated change detections on a property intelligence platform. With the right combination of machine learning and computer vision, a strong platform can highlight specific areas of an image that have changed. The platform can even spotlight the specific changes themselves, such as a damaged roof, an added secondary structure, or other major risk drivers.
Once insurers are equipped with a property intelligence platform outfitted for risk monitoring – including both historical imagery and automated change detections – they can then apply this technology to various use cases, especially renewals and claims. When used properly, risk monitoring gives insurers a look at the past, present, and future of every property.
An archive of historical imagery allows insurers to look at a property’s real condition in the past, which is especially useful for appropriately pricing risk, as well as for mitigating fraudulent claims. At binding and quoting, the ability to look at a property’s past condition shows how well it has been maintained, and also reveals any major changes that could contribute to higher risk. This contextual, “hindsight” view of property condition can also help insurers to verify claims and avoid fraud. Following a major catastrophic event, claims professionals are often overwhelmed by the sheer amount of customers submitting claims. Amidst the confusion of this process, some bad actors may submit claims for preexisting damage not caused by the event in question. Historical imagery removes this problem by showing real property condition before and after the event.
In addition to its hindsight function, risk monitoring also gives insurance professionals the gift of foresight, allowing them to see how a property continues to change in the present, and how those changes may affect future risk. Again, this function is particularly useful for streamlining renewals and claims. In order to ensure risk continues to be priced appropriately, underwriters need a comprehensive view of property condition at time of renewal. Often, however, they have not ordered an inspection on the property in many years. As a result, they are forced to either send out additional, costly inspection teams, or else price risk blind. Historical imagery and automated change detections can automatically flag properties that have experienced major changes since their policy was first written. They can then direct their attention towards the properties that have changed the most over time while straight-through-processing more solid risks.
Risk monitoring, in its forward-looking function, can also make the claims process more efficient for insurers and more painless for their insured. In the past, insurers were forced to wait to evaluate claims until on-the-ground conditions were safe. With the rise of property intelligence, claims professionals can monitor imagery before, during, and after a major weather event. They can then jumpstart the claims process prior to first notice of loss (FNOL), ensuring that policyholders do not feel abandoned during their time of need.
This blog series began with a simple question: what is property intelligence? We have answered this question by outlining four primary functions: analyze, score, manage, and monitor risk. Now that we have explored these four, we may conclude with another simple question. Why exactly do P&C insurers need property intelligence?
Simply put, P&C insurers need property intelligence if they want to continue to succeed at their business in a rapidly changing world. Insurance is a very old industry, and significant change often takes time to set in. But in the face of climate change, increasing catastrophic events, and shifting customer expectations, insurers cannot afford to dwell on the past. They need new tools and strategies today that can help them automate inefficient processes, predict and prevent losses, and more effectively serve their customers. That is what property intelligence is for.