Location, Location, Location

The events of Sept. 11, 2001, demonstrated that insurers need to have a constant understanding of their risk accumulation. While today's geographic information system technology can provide that, carriers need to lay a foundation of reliable location data before they can leverage state-of-the-art GIS.

Enterprisewide Function

But these and other benefits that GIS affords remain largely out of reach of insurers that fail to consider location intelligence as an enterprisewide function of business decisioning. When it comes to GIS, "Carriers are still suffering from a point-solution mentality," asserts Gail McGiffen, a partner with Accenture (Chicago). "Part of that is the habit of spending years with five people in the home office using GIS for CAT [catastrophe] modeling."

Use of location intelligence also has been confined with regard to where it sits within the insurance value chain, McGiffen believes. "This is an industry that for years has looked at location as a back-office, exposure-management function," she comments. "There has been an awakening that you need to have location information leveraged earlier in the process and not just see retrospectively what you have there."

The successful application of GIS is limited by the integrity of the data that it processes, which historically has not been very good, notes McGiffen. Legacy policy admin systems fail both in the diverse ways they collect address information and with regard to their inability to recognize phenomena such as multiple buildings at a single address. "Location intelligence needs to be pervasive across the enterprise, and the way that starts is by capturing location information up front and leveraging external data in the underwriting process to do a better job of verifying data from the moment you get it," she says.

That information should, in turn, be fed to a central database dedicated to the capture, cleansing and storage of location information on the pattern of a customer information repository, McGiffen recommends. That repository, including cleansed data extracted from existing systems, provides a basis for creating a location Web service to be leveraged across the enterprise in the same form by anyone, at any time. That basic location information then could be enriched by being combined with external sources of data, and then processed through mapping technology that provides robust spatial analytics and visualization.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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