Can open data help underwriters reduce risk?

The role of underwriters in the insurance industry is a vital one, as they decide whether to accept or reject risks on behalf of insurance companies. Brokers and agents submit insurance applications on behalf of businesses and individuals and the underwriter reviews the application, ultimately deciding whether to offer insurance to the applicant.

Many people will be unaware that underwriters can use open data in order to gather information on applicants before making a decision. The sources of information are many and varied in order to gather as much data as possible before deciding. Read on to find out what open data is being used by underwriters:

Companies House

Companies House is a UK government agency with an online resource that enables users to find out information about companies. The department incorporates limited companies, dissolves companies, registers the information that companies must provide by law and also makes the information available to members of the public, including details of current and disqualified company directors. There are more than three million limited companies currently registered in the UK and anyone can carry out a Companies House search among them

Local Authorities

From planning applications to business addresses local authorities release a wealth of data not available anywhere else. Want to know if a property has changed use or added another floor? Need to know who’s occupying a commercial address? Check what’s available on the relevant local authority site. A lot (but not all!) of their data is released as open so you can reuse to your hearts content.

Licencing

If you’re underwriting a business it’s good to know if they hold the right licences. For example, if you are thinking of insuring a garage which offers MoTs they need to be registered with the Department of Transport. The same logic applies if a company’s main business is gambling, again this needs to be registered with the Gambling Commission. By cross checking you can independently verify a company and reduce your risk of fraudulent claims.

Property prices

The type of property and its location are taken into account when underwriters are assessing home insurance. Your postcode enables underwriters to ascertain the type of area in which you live, for example, whether it’s at risk of flooding, or whether it has a high crime rate, based on claims data and crime statistics. Occasionally, underwriters will refuse to cover an individual due to a particularly high risk, such as living in a floods blackspot.

Inspections

From care homes to Chinese takeaways a lot of businesses have to comply with regulations. If a business you are underwriting requires a licence you can easily view their last inspection report to ascertain how well run the business is. For health related businesses you can check the Care Quality Commission site. If they handle food try the Food Standards Agency.

968 Publishers

In total there are 968 data pushers in the UK, not all will release data of interest to an underwriter but a lot will. However, as there is no national standard or central publishing mechanism (have you seen data.gov.uk recently?) it will take a lot of trawling and research to find what you need.

 

The quantity of open data available to underwriters is increasing steadily as it’s government policy to increase access to public data, maximising efficiency for underwriters and reducing the risk of fraud considerably.