We all have one, but how many of us understand how we got it, and what it really means?
Addresses situate us all at a point in space and help us to easily navigate our surroundings. Having one gives us access to financial security, the license to drive, to travel, to have food delivered to our door at 2am if we want.
But how are these values assigned to the particular portion of the globe we call home (or work)?
From postcode to geocode
An address is in essence, a description of a location, and most of us think of our address in terms of how receive our post. Many postal services around the world assign postcodes to help sort the post into sensible batches for delivery and we are fortunate in the UK to have a very detailed postcode that typically groups less than 100 addresses at street level.
Geocoding is the process of taking that address and determining the geographic coordinates associated with it.
A particular property may have multiple addresses, generally these will be the same but sometimes they can be different which can be confusing e.g., ‘1 High Street’ and ‘Cosy Cottage, High Street’ could be two different representations of the same address. The two main sources of addresses in the UK are local authorities and the Royal Mail. The Ordnance Survey (OS) will be notified of a new address by the local authority and will survey the property and produce the associated coordinates - often referred to as the geocode.
The Peril with postcodes
Insurers typically consider postal addresses during the quotation process and assess levels of risk associated with the postcode before pricing the risk and generating a quote. This has been the process for decades and whole pricing models have been built on the collated address data generated from this exercise.
The problem is that postcodes are broad areas that could encompass a variety of different terrains. A property at one end of a street could sit right on the side of a flood plain, whereas one at the other end may be on a slight elevation, rendering it high and dry. Same postcode, but a much more attractive risk to any insurer.
As a consequence, there is a very real chance that insurers could be:
· Accepting risks that would otherwise be declined
· Declining acceptable risks
· Under-pricing poor risks
· Over-pricing good risks
All of these have a tangible impact on the insurer’s bottom-line and its ability to remain competitive and solvent in a challenging market.
Zooming in on risk using geocodes
Insurers who can embed geocoding into their risk assessment and rating processes will have a better and more accurate view of risk and this can be used to gain competitive advantage.
As the OS has surveyed the individual property and assigned the code, we can be confident in gaining a much clearer, more accurate view of the risks on cover. This rooftop level view of a property is the gateway to understanding a greater level of detail of the risk including historic flooding in very specific area, topography, soil hazard and the potential for future subsidence/erosion, exposure to high winds, even local crime rates. All factors which have a tangible impact on the property exposure and pricing.
What’s on your book?
Understandably, with such a huge volume of third-party data now available on individual properties, both open-source and licensed, it can be a daunting task for an insurer to understand the best way to access, collate and interrogate this data in any meaningful way.
This is where Addresscloud comes in. We work with a huge number of leading data sources to provide a fast, accurate and cost-effective geocoding service for the UK and Ireland, helping our partners to understand exactly what is on their books.
We’ve even expanded our service to include Location Intelligence, which alongside flood and subsidence data, can help our partners to pre-fill quotation forms with details such as number of bedrooms, property construction materials, age, property value and rebuild costs.
Working with us, our partners have (almost) everything they need to make an informed, accurate assessment at their fingertips, presented in a user-friendly format.
So, what’s on your book? We can tell you.
Contact me to have a chat about how we can help
T: 01223 625360