Tag Archives: location intelligence

The Most Important (and Overlooked) Tech

Geographic information systems (GIS) may conjure up images among insurers of an old technology that tends to be used by a few passionate specialists at their company. It is true that the technologies for mapping and visualization have been around for decades. (I first saw a demo of GIS for insurance in 1989, and the potential blew me away). It is also true that usage in insurance is often limited to a few high-value areas of the business. Although GIS can hardly be called an emerging technology – much like AI, which has also been around for many years – it could be considered a resurging technology.

This is a new era for GIS. The core GIS technology platforms have been extended to enable solutions for what many now call location intelligence. There are some good reasons why insurers should be considering an enterprise location strategy as an important element of their overall business strategy.

  • Ease of Use: This might seem counterintuitive because the use of GIS systems traditionally required individuals with deep skills in data, geography, demography and other sciences. But today, the user interfaces have been modernized, templates and apps abound and business users are able to leverage the technology without difficulty.
  • Open Platforms: The sharing of maps, apps and data related to GIS solutions is extensive. Collaboration among government agencies, businesses and individuals is in high gear, especially because location intelligence-based solutions are often leveraged to address important societal issues. A prime example of this is the collaboration that occurs during natural disasters.
  • New Data and Maps: The spread of connected sensors and devices across the planet has produced many new data sources, enabled the creation of new mapping layers and dramatically increased precision. A connected device might be indoors or outdoors, stationary or moving, urban or rural and able to collect highly accurate data about objects and what is happening to and around them.
  • New Spatial Technologies: The technologies for indoor mapping, 3D, temporal analysis and many other aspects of spatial technology continue to advance rapidly. In addition, the scale and speed of real-time processing open up opportunities to capitalize on the technologies.

From an insurance standpoint, GIS creates possibilities for gaining insights about managing risks, understanding customer needs and behaviors and improving operations. More precision is possible in analyzing the exposures in a book of business, selecting and pricing risks and handling claims (especially CAT claims). New risks and customer needs can be identified, leading to new products/coverages or more insight into geographic locations for agents. New services can be provided to policyholders, including real-time alerts and information to help them better manage their risks.

See also: Strategist’s Guide to Artificial Intelligence  

The potential business use cases and high business value warrant the attention of senior executives. Insurers should seek to create an enterprise location strategy, harness the new era of technology and build on the expertise of existing GIS users in the organization, ultimately enabling a broader range of employees to solve problems in their respective domains.

Could Location Data Be the Golden Thread?

In insurance, location is everything. It helps insurers understand where the risks are, whether there has been accidental (or deliberate) accumulation of risk and where their customers are. Location helps insurers optimize their distribution strategy, their claims services deployment, their supply chain and even how they market and advertise their services.

The technologies of location intelligence and weather prediction also naturally converge to help anticipate the impact of hail and storm, and allow insurers to proactively advise their policyholders to act (although only half of policyholders who are warned of an impending event actually take action). Bringing weather and location information together creates an environment where insurers change from being reactive to being proactive. New touch points are also created with policyholders (as opposed to a single annual request for premium), with the potential both to add value to the insurance proposition and also to improve loyalty

Some might reasonably argue that weather forecasts are already available from the news. Perhaps one task for insurers going forward is to create a more effective interlock between weather forecasting, policyholder behavior and premium reduction?

Increasingly, location is being seen as a subset of big data rather than a stand-alone technology. In a world of data where 80% is unstructured and uncertain, do the coordinates of location provide some sort of anchor for all the new information becoming available? After all, what could be more certain than where something or someone is physically located? Imagine if location data became the golden thread that tied all insurance information together?

For many, location information still equates to mapping and “flat” visualizations. It is fundamentally descriptive in nature, albeit providing effective illustrations of potentially complex issues. As location intelligence increasingly aligns to predictive and cognitive analytics, perhaps the “power of place” may start to assume new meaning?

Location data is becoming increasingly pervasive in the insurance industry. The connected car, the connected home and the connected person all have a location component.

Perhaps the future for insurers isn’t just around being “data-driven” but “location-data-driven”?

Location, Location, Location – It Matters in Insurance, Too

Location plays a critical role in the insurance industry. The issue of place is central to business acquisition, channel management, underwriting, and claim adjudication, to name a few insurance business functions. However, most insurers are challenged by how to find, access, and use the requisite geographic information to improve decision-making, operations, and customer service. Fortunately, one potential solution to the challenge is emerging through the use of three groups of technologies – social media, location intelligence, and mobility – which some technology and telecommunication firms are beginning to support and/or package together into one set of interdependent capabilities called SoLoMo. Ovum's recently published report SoLoMo: Social, Location, and Mobility Join to Enhance Insurance Commerce and Service describes what SoLoMo is and discusses SoLoMo's stages of engagement, major capabilities, and revenue opportunities for insurers. One revenue possibility is offering telematics value-add services such as discounts at restaurants to reward good driving behavior.

SoLoMo is a set of capabilities that “knows” about the longitude and latitude of a geographic area and, to some degree, knows in real time about the tangible assets (e.g. buildings, vehicles, livestock) within it, whether those tangible assets have embedded sensors or not. SoLoMo creates and delivers its knowledge in a real-time, geographically defined context. The contextually determined knowledge is created by streams of information captured on a device as a person travels to or moves through a location. That information includes the needs of the person using the device, the device's location, and the location's tangible assets. The information also includes social media and business enterprise social network feeds about the location and its tangible assets. Currently, a SoLoMo device could be a smartphone, tablet, or vehicle with an embedded sensor.

There are four stages of real-time engagement between a SoLoMo device and its surroundings. SoLoMo devices can already support some of the capabilities of the first three stages of engagement:

  • Stage 1 – Passive engagement: This is the basic level of SoLoMo engagement, and it offers a “for your information” purpose about the location of homes or businesses.
  • Stage 2 – Active engagement: This level of engagement includes the commonly available turn-by-turn directional guidance with or without voice navigation. However, it could also include receiving information from other smartphones or tablets in the geographic area.
  • Stage 3 – Interactive engagement: This level of engagement enables insurance stakeholders to receive and incorporate information from sensor-embedded tangible assets in the geographic area concerning their state (e.g. damaged or destroyed).
  • Stage 4 – Autonomous engagement: This level of engagement enables the SoLoMo device to accomplish everything in Stage 3 but without human intervention.

SoLoMo will need to encompass six major capabilities to support insurance company commerce and service requirements as the levels of engagement evolve through the four stages. The objective of each capability is:

  • Determine: This capability enables users of a SoLoMo device to determine if a physical artifact exists in a given location, whether the person using a SoLoMo device is stationary or moving through the geographic area.
  • Share: This capability enables users of a SoLoMo device to share ideas with personal social media or enterprise social network (ESN) members about the state of the physical artifact and its content.
  • Capture: This capability enables users of a SoLoMo device to capture information about the location and its tangible assets (and possibly the contents of each tangible asset).
  • Interact: This capability enables users of a SoLoMo device to interact with a digital avatar representing the tangible asset and its content. The digital avatar would store the date and nature of the interaction as well as the name or other identification of the SoLoMo device (or person using the device) engaging with it.
  • Integrate: This capability enables users of a SoLoMo device to integrate third-party data sources (e.g. NOAA, Marshall & Swift/Boeckh) and information from the insurer's ESN, core administration, and customer relationship management or customer experience management (CRM/CEM) systems together on the device.
  • Personalize: This capability enables the user of a SoLoMo device to receive personalized information based on the insurance stakeholder's needs and the geographic area.

SoLoMo offers insurers an opportunity to provide fee-based value-added services. This is important because it helps insurers diversify their earnings from being primarily risk-based premium revenue. Examples of value-added services that insurers could offer policyholders or prospective clients include the following, which could be augmented with social media feeds or, where appropriate, the insurer's ESN content and real-time commentary:

  • Telematics services – Insurers could offer: (1) discounts at restaurants based on good driving behavior; (2) safe driving programs that provide discounts on automobile insurance premiums to policyholders willing to install a device, or an app on an existing device, that prevents the driver from using a smartphone while the vehicle is in motion; or (3) information about the closest authorized automobile repair shop.
  • Remediation services – Insurers could provide a buying service for requisite items to restore retail customers’ homes or commercial clients’ business facilities, including bundling reviews from other policyholders or the general marketplace about the quality of products and services from companies selling the replacement products.
  • Child or elderly parent safety monitoring – Insurers could offer clients monthly geo-fencing monitoring of children or elderly parents' movements within a target location.
  • Business interruption cost estimation – Assuming the enterprise has a sufficient number of embedded sensors in the facility's structures and content the enterprise sells, insurers could estimate the state of each of the enterprise's tangible assets (existence, destruction, damage), compare that with data sources relating to labor and material cost to replace or remediate the tangible assets, and wirelessly report that information to the enterprise's CFO and chief risk officer (and to the insurer's actuarial and claim departments).