Over the past few years, the use of geospatial data for consumer applications has boomed. People now wear watches that track their running routes and mileage, use navigation devices and applications in their cars for directions, and check their phones to locate everything from nearby restaurants to doctor’s offices and pharmacies.
Increasingly, enterprises are getting in on the action, too, using location intelligence tools to make business decisions and better serve their customers. Managers in a wide variety of fields are coming to understand the competitive advantages that come with the savvy use of geospatial data. This trend is proving particularly true for those businesses in the fields of insurance, financial services, and public sector.
From Reactive to Proactive in Insurance
Location intelligence tools can help insurance carriers in a number of different ways. They enable insurers to more effectively determine risk when writing policies, allocate resources before, during, and after a natural catastrophe (such as a hurricane), and effectively determine how much capital to keep in reserve to pay out claims after a major event.
Insurers that want to accurately price insurance coverage on a particular house need to know if it’s in an earthquake zone, a flood zone, or in an area that is prone to wildfires. And, if they know a major storm is approaching, they want to know, with precision, how many policyholders that could be impacted.
Products like MapInfo Pro, which allow users to visualize geospatial data, have revolutionized the way insurance underwriters, actuaries, claims, and marketing professionals utilize the information. While data used to be broken down by zip code, MapInfo Professional lets users drop a pin in a location and then micro-analyze data however they choose—for example, by creating a mile-radius ring around the projected storm path.
As more geospatial data becomes available, insurers are moving away from a “reactive” role of merely assessing damages and paying out claims, and toward a more “proactive” role of helping their customers understand the natural perils and even help prevent damages from occurring in the first place. Carriers can contact their customers who are in the path of a hurricane, for example, and tell them what steps they can take to protect their house. That way, the customer can help limit the damage (such as broken windows), and the insurer can minimize the loss and the payout. If they can mitigate that risk, it makes both parties happy.
Making Informed Decisions and Understanding Customer Profiles in Financial Services
Through the use of location intelligence tools, banks and other financial institutions also can make more informed decisions about their businesses. This can include decisions about where to place branch locations and ATMs, as well as helping to evaluate whether existing assets are achieving their full potential.
For example, a regional manager can select a specific branch in Boston. Through a better understanding of its trade area he or she can assess its relative performance. If the area’s demographic profile suggests that there is $100 million worth of potential business in the area, but the branch is only generating $25 million, further evaluation can be conducted to better understand the shortfall.