Leveraging Location Intelligence for Enhanced Damage Insurance Underwriting in the Context of Climate Change

Abstract

This study presents the contribution of location intelligence to property damage risk evaluation in the insurance industry through a decision support system prototype. We followed a standard design science research methodology for the design and development of the prototype and its evaluation by 11 industry experts. The results indicate that underwriters, the intended primary users of the prototype, had a positive perception of the prototype, while actuaries and managers expressed concerns about data and process integration to existing practices. Overall, the prototype highlights the potential of geospatial data, emphasizes the need for standardized risk evaluation processes for underwriters, and underscores the competitive advantage gained through access to quality data. These findings contribute to the understanding of how location intelligence can enhance risk assessment in the insurance industry.