Risk assessment is one of the most important aspects for the insurance sector, and geographic information system (GIS) technology is proving to be quite beneficial for that. There are also multiple other advantages of GIS use in insurance and we will take a brief look at some of them to understand how it really can be a gamechanger – if it isn’t one already.
Natural Disaster Prediction and Analysis
The using of GIS tech has enabled insurance companies to properly estimate risks from investing in geographical areas, prone to natural disasters the most. As threat and risk assessment is greatly improved via the availability of previous disaster data and predictive analysis, insurers can now design their policies in such regions adequately.
Worker’s Compensation Insurance Providers Can Benefit from GIS Data
In order to understand how geographical information can be used by insurers providing worker’s compensation insurance, we will need to take a look back at what exactly the service does.
Spatial data refers to any and all information, related to the geography and history of a particular region. If a mining business is looking for workers compensation insurance quote from multiple insurers, GIS can help the insurance companies detect the condition and history of the land where the mining operation will be conducted, along with all the associated health risks for the workers.
By getting a fairly accurate idea regarding how risky the mining operation could turn out to be, they can then proceed to devise a policy with appropriate premium rates and coverage. This would keep them from putting themselves in a precarious situation if something does go wrong during the operation.
The same theory applies to construction sites, as well as almost any other business which involves some degree of risk that can be estimated with GIS technology.
GIS and Fraudulent Claims
If insurance frauds could be detected and avoided by insurers, they would actually have the financial capability and willingness to lower premiums and offer better deals to the clients who need it the most. Unfortunately, though, insurance fraud continues to be a huge problem in not just the United States, but globally as well.
Although geographical data systems can’t exactly prevent all forms of insurance fraud, they can certainly mitigate the chances by eliminating address falsification issues. The address or more specifically, the location details of the client is a very important factor in assessing the risks and determining the premium rates. Therefore, if clients falsify their addresses, the company’s estimation would be thrown off balance, resulting in losses, if and when something does happen to the insured individual.
GIS is one of the most useful data sources in existence and its application is widespread. Sometimes, certain industries use GIS information, without even realizing that they are using it, which further highlights the necessity of the technology. In the near future, as the hardware components and the machine learning capabilities of analytical AI improves even further, the use of GIS could do a lot more than we can even think of at the moment.