Data drives the insurance industry, which is why clearly presenting good data is essential when submitting an insurance application.

Author: Ampy Jimenez

To ensure adequate insurance coverage, it's imperative that every application submitted to the insurance market include not only better data points but also a clear summary of the intent, expectation and results expected.

Insurance is a data-driven industry. Every day, new brokers enter the field, and each one has a lot of data to offer, but only the ones converting that data into useful information and clearly communicating its usefulness in their submission will obtain the best results.

Even more significantly, powerful new analytics technology enables insurers to use that data in ways they hadn't previously considered. Structured data is used to influence underwriting, rating, pricing, forms, marketing, and claims handling. It can be used as leverage.

When presenting data in a submission, focus on these three key elements:

The quality of data. Because data comes from so many different sources, it's difficult to link, match, cleanse and show information in a meaningful way. The better the data quality, the more confidence underwriters will have in the decision-making. Reliable information mitigates guesswork and risk in decision-making and results in lower rates.

Loss estimates. Understanding and summarizing the scenarios of the losses and their potential impact for your underwriter can assist in the underwriting assessment every underwriter makes.

Data needed for properties. Complete the schedule of locations with Construction, Occupancy, Protection and Exposure (COPE), the four basic elements of underwriting data. Both COPE and secondary COPE data characteristics relate to the building's susceptibility to damage from windstorms or seismic activity.

  • Construction materials, square footage, age of the structure and any updates to plumbing, electrical and the roof
  • Class of insured (each class — retail, office, wholesale, manufacturing, service, etc. — presents its own relative risk)
  • The insured structure's proximity to a high-hazard operation
  • The local wildfire risk
  • The possibility for damaging winds and/or water
  • The structure's flood zone location
  • The structure's earthquake exposure

In insurance, premiums that are too low because of inaccurate property information could lead to lost revenue. Insurance companies depend on a risk management software system to identify and mitigate risk, improve operational and inspection efficiency and build a more robust platform for information. This approach will maintain the information the carriers are looking for in an organized fashion with updated information.

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Disclaimer

The information contained herein is offered as insurance Industry guidance and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client-specific risk management advice. Any description of insurance coverages is not meant to interpret specific coverages that your company may already have in place or that may be generally available. General insurance descriptions contained herein do not include complete Insurance policy definitions, terms, and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis.

Insurance brokerage and related services provided by Arthur J. Gallagher Risk Management Services, LLC. (License Nos. 100292093 and/or 0D69293).