Location-aware rating solutions provide an essential building block in supporting today’s more sophisticated risk analysis, pricing and risk assessment decisions.

Key themes emerging from the insurance industry:

• the desire to rate at property level as opposed to post code sector or unit;
• the need to provide greater levels of automation, particularly in commercial/SME business;
• a focus on enabling the reclassification of low, medium and high risk policies to provide a better risk-weighted income distribution;
• an emphasis on making greater use of accumulation information in the underwriting and re-insurance management processes.

There is a clear precedent for introducing location-aware rating into the pricing and underwriting ecosystem.  Benchmarks from existing customers of Mapflow include the following:

• Increased Premium Income. Through rating at individual property level policies which may currently be declined on the basis of a high aggregate (post code) risk can be accepted on the basis of their property specific risk profile.  Insurer A: expects to increase its book by 8% through its adoption of property-level rating.
• Reduced Claims. A more detailed understanding of an individual location's geographic risk leads to a cleaner book and reduced exposure to perils related risk.  Insurer B: demonstrated that 45% of flood claims by value would have been flagged as high risk by Mapflow’s solution.
• Increased Efficiency. By automating various elements of the underwriting process referrals and other manual interventions are reduced.  Insurer C: used Mapflow's solution to cut referral rates by 70%.
• Reduced Reinsurance Costs. Better management of accumulations leads to a longer term reduction in reinsurance costs.   Insurer D: used Mapflow's solution to identify previously unknown accumulations; actual accumulations were higher than previously thought, as measured by the insurer’s internal business rules.