LexisNexis Risk Solutions, a data and analytics provider focused on the insurance, financial services and public sector markets, has launched LexisNexis Location Intelligence for Home, a predictive analytics solution designed to help American Home Insurance Company more accurately assess property risk.
The tool uses artificial intelligence and neural network modeling to support underwriting decisions during the new business and renewal phases, the company said.
Insurers are increasingly looking to other sources of insights outside of traditional underwriting methods to identify potential risks earlier and improve risk mitigation efforts before claims occur, according to LexisNexis Risk Solutions.
The company said location intelligence is integrated into LexisNexis® Smart Selection, its automated data platform that provides inspection alerts and configurable business rules designed to help insurers identify and prioritize high-risk properties.
Insurers are facing increasing pressure from rising repair costs, more frequent catastrophic events and the need for greater underwriting accuracy, LexisNexis Risk Solutions said. The company notes that traditional property valuation methods, particularly those that focus primarily on external property conditions and historical claims data, can overlook important indicators of future losses.
LexisNexis Risk Solutions highlights that by 2025, non-weather water claims will account for 24% of all claims, while claims related to weather-related water damage will account for 4%.
The company explained that location intelligence was developed to provide a more detailed understanding of risk at the property level by combining weather-related risks with non-weather risk factors that contribute to insured losses. LexisNexis Risk Solutions said the model leverages industry-wide housing claims data, location-based intelligence and historical loss trends to generate predictive risk scores for residential properties.
According to the company, homes with the highest location intelligence scores are 20 times more likely to experience claims than homes with the lowest scores. LexisNexis Risk Solutions added that predictive insights are integrated directly into insurers’ workflows to support more consistent underwriting assessments for potential and existing policyholders.
George Hosfield, Vice President of Home Insurance at LexisNexis Risk Solutions, commented: “Rising loss costs and changing risk patterns are making it more difficult for home insurance companies to rely solely on traditional underwriting methods.”
“By bringing location intelligence to Smart Select, we are giving home insurers a more consistent way to assess personal property risk using deeper, location-based insights within the workflows they already use. Understanding where claims are more likely to occur also provides insurers with the opportunity to work with consumers to mitigate those risks ahead of time. We will continue to invest in these capabilities so that insurers can keep up with changing risks and make more informed decisions over time.”
LexisNexis Risk Solutions said the platform provides AI-driven risk scores across six exposure areas, including hail, wind, weather-related water, non-weather-related water, freezing events and collapsed or falling objects. Insurers can also incorporate roof condition ratings to further understand property risk, the company added.
The company said the solution is designed to provide more detailed risk segmentation to support underwriting and renewal decisions, while also improving operational consistency through integration with Smart Selection. LexisNexis Risk Solutions says the platform eliminates the need for insurers to build and maintain their own predictive models in-house and also provides portfolio-level visibility to assist broader risk management strategies.
“Traditional property risk models are built around the signals that are most readily available, not necessarily those that best predict loss,” added Meredith Barnes-Cook, senior principal at Datos Insights. “Non-weather water alone accounts for nearly a quarter of all home claims, a risk driver that exterior inspections and weather overlays often overlook. Next-generation underwriting tools need to close this gap at the individual property level.”
LexisNexis Risk Solutions said the launch of Home Location Intelligence builds on the company’s previous rollout of the technology in the commercial insurance market. The company added that it plans to submit the predictive model to several U.S. states in the coming months for use in insurance companies’ underwriting and rating processes.
