It’s springtime in the northern hemisphere which calls upon us all to embark upon a longstanding, sometimes dreaded tradition: spring cleaning. This, of course, brings up the common objection: why should I clean _______ if it’s only going to get dirty again? Because even Marie Kondo gets tired of it sometimes.
For a home, cleaning is more than just a way to maintain tidiness; it also reduces a home’s risk. For instance, cleaning your gutters can help rainwater flow nicely and drain away from the house, keeping your foundation safe from damaging leaks. Inside the house, keeping clothes off the ground, taking the garbage out often, and tidying up makes it more difficult for pests to opt-in as your uninvited, destructive roommates.
Trimming trees can keep them from damaging your home in bad weather. Pruning your plants and maintaining flower beds deters termites from finding your house a tasty snack. In short, regular maintenance can help avoid the slow buildup of a future disaster.
And while spring cleaning can be impactful on the small scale, for a single homeowner and a single home, that same impact can be multiplied when applying the same principles to an insurance carrier’s book of business.
As sneakier, secondary perils take center stage, denting roofs with hail and creating perilous floods, understanding the state of the homes in your book, recommending small-yet-meaningful actions to homeowners, and selecting the right risks can both avoid underinsurance and help keep policyholders satisfied.
The State of Portfolio Cleanup
A recent study conducted by Arturo found that portfolio risk professionals wanted property insights updated on a monthly basis to coincide with the frequency at which they review their portfolio.
Additionally, a poll conducted by Instech further found that, when given the option, a majority of respondents wanted all of their property attribute data to be updated in as close to real time as possible.
This, of course, is logical — people will always want things as fast and as good and as cheap as possible. But in digging into the Arturo study, we found that some respondents who answered monthly, in deeper discussion, admitted that this was probably more aspirational. Notably, one respondent remarked that their current processes likely wouldn’t allow them to review their portfolio any more than annually.
This underscores a critical tension in the technology space today: in many industries, including insurance, people desire things that are technologically interesting and the “best” of what’s available, but sometimes these desires can be overengineered or disconnected from the actual challenge they’re trying to solve.
Deep Cleaning Your Portfolio
Knowing that an average carrier wants to review their portfolio as often as they can is a good sign to maintaining book health. However, internal process challenges aside, there is one major technological hurdle when it comes to making that a possibility: big data.
Having a lot of information can quickly devolve from feeling empowering to overwhelming – a search for a few critical needles in a giant haystack. How do you parse, categorize and identify exactly what to pay attention to, especially as it relates uniquely to a carrier’s portfolio?
Today, most carriers have inconsistent and disconnected datasets from different silos that govern their business. Oftentimes, this results in claims adjusters having multiple monitors, cross-referencing various bits of information that they manually pull up, sift through, and analyze. Underwriters pull information from a variety of sources, and sometimes, this can be dumped into one big data lake, but wading through it can feel like drowning.
That’s why it is critical to move towards a unified dataset, with all information in one place across underwriting and claims. Arturo plays a key role in making this happen as the only portfolio intelligence provider that transforms property data and insights into impactful intelligence for underwriting, risk and claims.
Rebalance Your Risk Appetite
With a unified picture of property risk, you can examine all the underwritten policies in your book and quickly triangulate where they stack up. Are you too overexposed with lower quality roofs in a more hurricane-prone geography? Is there a great degree of tree overhang? These policyholders can be sent helpful tips to doing their own spring cleaning, knowing that this will bring their overall risk down. All this can be done without ever having to step foot near the property.
Oftentimes, insurtech providers will offer scores to suggest what is or is not too risky, but every carrier has gauges risk differently. With discrete property insights, you can have the visibility to use your expertise and judgment to set your own risk appetite.
Identify New Targets
You can use the same technology to find new areas in which to expand business. By gauging the risk levels of the homes in advance, you can work closely with your marketing team to target those communities to help bring good risks into your book.
By contrast, you can also identify within your current book underinsurance gaps. Is there an outsize amount of new solar panels that are underinsured? By comparing upcoming renewals and their last known policy information against current property insights, you can easily – and preemptively – identify areas that may need modification.
This kind of information can even be used to correlate against claims and conduct studies on property condition predictiveness. Because all of the necessary property intelligence is in one place, comparing conditions to claims is simple and straightforward.
Create Resource Efficiencies
And when the time comes to send someone out to validate a claim or investigate a property during underwriting, those resources can be deployed effectively, having been given all the tools to maximize the use of their time on site. In this way, these critical on-the-ground resources can be empowered to specialize in riskier properties.
It can be easy for carriers to focus on new business as the primary way of driving profitability. But spring cleaning reminds us that the bigger risks are ones we might forget about – the nagging ones that already exist within our own four walls.
In this way, a carrier’s book is like an iceberg, with new business above the water, seemingly very large and important to focus on. But below the waterline, your existing book awaits — dusty, risky, and needing some care. Regularly reviewing your book based on a unified set of data can help protect carriers from financial loss, increase profitability and make better company-wide decisions. Let’s get cleaning.