Solving the geocoding puzzle

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Read part one here.

A refresher

Accurate geocoding is vital for property and casualty insurance carriers, as it underpins risk assessment, underwriting, and product development. Traditional geocoding methods like parcel-level, street-level, and ZIP9 often fall short due to inaccuracy and outdated data, especially for rural areas, new builds, and large properties. Rooftop geocoding, however, offers precise location data, mitigating these issues and providing better risk assessments. Coupling rooftop geocodes with persistent unique identifiers (PUIDs) ensures consistent, up-to-date address information, which is crucial for accurate risk modeling and policy coverage. This transition to rooftop geocoding and PUIDs is a smart move for insurers seeking reliable, precise geospatial data.

Real-world applications of PUIDs in insurance

Industry experts echo the sentiment that rooftop-precise geocoding data combined with the power of change-tracing PUIDs can't be overstated. Dependence on only parcel-centric and address-level geocodes in policy formulation can precipitate inaccurate risk evaluations and compliance challenges in underwriting. Although parcel-centric geocodes are rooftop accurate in smaller lot sizes, reliance on them for non-postal addresses or areas with a larger lot size or multiple components in a building footprint may escalate full-limit-loss payouts, diminish revenue streams, or even entangle your organization in regulatory scrutiny. 

A persistent unique ID will allow you to employ best practices, such as preappending data while linking multiple data sets to a location ID, eliminating the high overhead of spatial calculations with every single address. Using PUIDs in combination with geocoding data bolstered by address verification has provided tangible results to real people in the insurance world by: 

Preappending data

Insurance companies are constantly looking for ways to extract value from analyzing customer address data and finding ways to fine-tune risk profiles. A consistent PUID that links the historical address as you run and rerun these data sets will ensure accuracy at the highest level. This further allows insurance and reinsurance carriers to price the risk they take more accurately. The full scope and exact information are initially available to them with PUIDs and geocoding technology. 

Complex risk profiles for a given address can be stored in a single PUID for lightning-fast modeling. Information such as distance to the coast, wildfire risk proximity, likelihood of sinkholes, potential flood zones, crime rates, etc., can all be stored within a single PUID.   Insurers will know that even multiple alias addresses that share a PUID will have consistent scoring and that these PUIDs will stay constant over time.

Maximizing ROI and smiles

Carrier loss ratios will improve because, with PUIDs and geocoding, underwriting risks will be understood more fully. Similarly, fewer programs will be canceled due to inefficient cost forecasting from bad address data.

Your ROI will increase, and the accuracy obtained efficiently will save agents time in underwriting and increase accuracy with the application process. Even though robust programs that utilize PUIDs and geocoding are already being used, some won't bog down an already comprehensive platform. With the right company, automatic updates are continuously running in the background to ensure your data is always the most accurate data available. 

Keeping address data consistent

Deduplication is imperative, especially in this industry. Even in the wake of a total catastrophe, such as a home-leveling earthquake or tsunami wipeout, geocoding pins and PUIDs can ensure that the correct area is found to rebuild and reinsure.

Your organizations can take pride in knowing they're not insuring risks that would violate underwriting rules and, more importantly, the statewide Department of Insurance laws. Consistent data helps your organization be significantly less likely culpable of fraud, which promotes fair payouts for both the customer and your organization. Regulatory compliance is easier achieved using these tools.

Heightening the customer experience

Claims will be processed more accurately and efficiently by identifying the impacted property from the very beginning. Accurately insured customers will create lasting relationships and return business in the future, as they will never be left in an uncomfortable or damaging situation from being under or over-insured. Word of mouth from a satisfied customer is one of the most powerful forms of free advertising.

Takeaway - Four steps for insurance providers

  1. Evaluate your current geocoding practices: Before you dive in, recognize what your organization is doing well and note where improvements could be made. Maybe you already have systems in place that assist in geocoding practices. That's a great starting point, but to heighten your experience, you also need to analyze your tech stack. A reliable, fast, and accurate one should be at the top of that list to prevent you from having to pay others down the line. The goal is to understand what processes are already in place and then tweak them for more accuracy and efficiency.
  1. Explore rooftop-level accurate geocoding solutions: Truly evaluate the level of accuracy in your geocoding solutions. If they claim to be rooftop-accurate, they should actually be rooftop-level accurate. Don't give companies a pass on giving you less than exact data.
  1. Implement PUIDs: As discussed, it's simply not good enough to only use geocoding when you're in insurance. City borders shift, streets are renamed, housing is split into mother-in-law suites, and many other changes occur daily. A PUID ensures that your organization is keeping up with the shifts and accurately assessing risk based on historical track records. 
  1. Partner with address intelligence industry leaders: While you could try to do this alone, you shouldn't have to. In many instances, finding an address intelligence expert who understands your pain points and addresses them all at once can be significantly cheaper and more efficient. 

Understanding the connection between PUIDs, geocoding, and address verification is crucial for property and casualty insurance carriers. Location-based risk assessment and underwriting processes rely on exact information. While traditional geocoding methods like parcel centroids and street-level data have served well in many cases, they often fall short in others and fail to keep pace with rapid changes in property configurations. 
In contrast, PUIDs provide consistent data linkage across diverse datasets, ensuring precise location data resilience amidst city expansions, address changes, and other alterations. This combination not only enhances risk modeling accuracy and compliance but also maximizes ROI by minimizing claims payouts, improving customer service, and ensuring regulatory adherence. For insurance providers, integrating rooftop-level geocoding with PUID technology is essential to navigating complex risk landscapes effectively and efficiently.

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Data management Homeowners insurance Property and casualty insurance
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