Asia-Pacific plays catch-up on better data

Asia-Pacific is not yet at the same level as the US or Europe in terms of quality, high-resolution data, which creates challenges in terms of accurately pricing and underwriting risk, Jason Futers, CEO of Insurdata, told SIRC Today.

Insurdata has analysed data in many countries across the Asia-Pacific region and while data quality in some countries is similar to that in the US, in others it is much lower.

“The main factors for this are aggregation of data and inaccurate address information,” said Futers. “This data challenge, however, is not confined to the region, but rather is most definitely a global issue.”

In the past decade, areas where insurance penetration and modelling capabilities have increased have been areas where there have been improvements in data quality, Futers noted.

“Access to higher-resolution modelling has often been the catalyst for improvements in data, so countries that have been modelled since the late 1990s, such as Japan, have seen improvements in data as a result,” he said.

The first step in accurately pricing and underwriting risk is exposure management, according to Futers. By focusing on the fundamentals of geospatial data quality and understanding risk characteristics, for example the point at which flood water enters a building, this can lead to numerous follow-on benefits.

“Exposure accumulation zones become precise and relevant to the underlying peril, leading to accurate underwriting, while the value from risk modelling increases exponentially, leading to a greater understanding of the exposure’s risk profile simply by matching the resolution of the model and exposure data,” said Futers.

For a region as large and complex as Asia-Pacific, he said this level of model maturity is years or even decades away in the case of many countries and perils.

Futers suggested there is a huge opportunity for it to lead the way in exposure analytics, as there are certain technologies that facilitate greater access to modelling capabilities globally.

“Accurate, location-specific risk assessment through mobile technology is already available and will continue to develop across all lines of business, all countries and for all perils,” he said.

“This level of accuracy and data distribution will identify the exposures and communities with the greatest protection gap, and offer cost-effective solutions that are tailored to their specific needs.”

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