GIS for Insurance

Executive Summary:

The natural hazards and human-made hazards are inevitable but assessment, emergency preparedness, and response such as prevention, discovery, planning, mitigation, management, insurance settlement, and policy are key areas where immediate attention is required. GIS has played important role in predicting, responding to managing and recovering from these above-mentioned disasters.

Business Challenges:

The insurance companies generally pay huge amounts after any catastrophic events, and consequently, their profit margins are affected significantly. This is due to lack of data assessment on the risks associated with such catastrophes.

Insurance company wanted to accurately identify properties at risk from natural and human error to predict to what extent they would be affected in different areas.

Tech Description:

GIS offers powerful tools to make spatial analysis such as risk analysis of earthquake, simulating effects of possible flood or selecting best locations for shelters.

The GIS is not only the user-friendly visual access and display, but also the spatial analysis capability and the applicability to apply standard GIS functions such as thematic mapping, buffer zoning, charting, network-level analysis, simultaneous access to several layers of data and the overlay, data management, and user-specific functions. The capability to link up to external procedures and software also provides flexibility, as these procedures can access data within GIS and present the results of analysis to GIS for viewing and analyzing.

GIS, remote sensing and photogrammetry can be used to identify hazards. Seismic faults can be identified by scientists using GIS to analyse satellite image, aerialphotos and field survey data. When the hazards have been identified, their representation can be stored conveniently in GIS databases. The information required for earthquake risk assessment includes the location and properties of seismic faults, surface geology, terrain slope, water table levels and inventories of epicentres and landslide occurrences.

Solution Approach:

The adoption of technological innovations such as GIS is not always a straightforward process. The adoption of GIS into an organization introduces fundamental change into the organization in its thinking about data.

The purpose of a GIS need assessment is to study the issues and considerations for the implementation of a GIS for an organization. The assessment focuses on the following details:

The needs assessment activity is composed of:

• Interviewing and documenting the needs of potential GIS users
• Studying Legal Issues and Data Security
• Reviewing Quality Assurance and Quality Control Issues
• Studying Training and Educational Issues related to GIS Implementation
• Compiling the results of the needs assessment into a list of GIS functions and a master data list.

At the conclusion of a needs assessment, an organization will have all of the information needed to plan the development of a GIS system. This information can be grouped into the following categories:

• Required GIS functionality - For a given organization, certain functions will be required, such as the standard operations of spatial analysis functions, query and display such as routing, overlay analysis, buffering, and possibly advanced analysis requiring special programming.
• Necessary GIS data - Many agencies use data that has a spatial component. Much of this data are hard copy maps or tabular data sets that have a spatial identifier such as addresses and zip codes or X-Y values (latitude-longitude, state plane coordinates, or other coordinate system). A needs assessment will identify how this information will be used by GIS applications.
• Customized GIS Applications needs - In evaluating the responsibilities and workflow within an organization, certain tasks are identified that can be done more efficiently or effectively in a GIS. These tasks will form the basis of GIS applications. Application descriptions prepared, as part of the needs assessment will describe these tasks.
• Procedures for maintaining GIS data - By looking at the workflow and processes within and between departments, responsibility for data creation, updates and maintenance will become apparent.

• Design the GIS database
• Identify GIS software that will meet the government's needs
• Reviewing Quality Assurance and Quality Control Issues
• Prepare an implementation plan
• Start estimating the benefits and costs of a GIS

Traditional Maps	Geographic Information Systems
Data are static	Data easy to update
Fixed projection, Scale, Coordinate System	Can convert to new, scale, scale or coordinate system
Quantitative analyses often tedious	Many manipulation options for analyzing maps
Difficult to combine multiple map sheets	Easy to combine multiple map layers
Overlays are restricted to a few layers	Can overlay as many maps as contained in database
Updates require re-drafting	Tools allow for map updates without re-drafting
Difficult to copy and share between many users	Multiple, simultaneous user access available
Huge recurring cost	Quick ROI on GIS Investment
Manual Paper maps	Dynamic digital maps
Inaccurate decision process	Accurate decision process

In nutshell, GIS allows insurers to achieve greater transparency of product rating plans by accurately quantifying each individual risk or policy. This allows the impact of each risk or policy on the total portfolio to be known. You can see how this leads to improvements in managing risks, pricing products, and handling claims.

Kumaran teams up with global partner for GIS solutions deployments.

To explore the benefits of GIS Insurance solutions contact Kumaran Systems at insurance@kumaran.com