Geocoding is becoming an increasingly important tool in the insurance sector, allowing for more precise risk assessments by pinpointing the exact location of insured properties. Moving beyond traditional postcode-based methods, geocoding provides property-level analysis, offering deeper insights into geographic risks such as flooding and wildfires.
As insurers seek more accurate data, the growing adoption of geocoding is reshaping how risk is managed, particularly in response to the challenges posed by climate change.
Mark Varley, founder and CEO of Addresscloud, shared insights into the company’s role in advancing geocoding technology. Varley founded Addresscloud in 2015 after nearly 20 years of experience in the insurance industry. His interest in geographic risk began during a significant project with RSA Insurance Group, where he helped integrate geographic data into the underwriting process. At the time, RSA became one of the first companies in the UK to use property-level assessments instead of relying solely on postcodes, providing a more granular approach to risk evaluation.
Varley explained that this move to property-level assessments was a key shift in the industry. “Before that, most companies in the UK were relying on postcodes to assess risk. But RSA moved to property-level assessments, meaning each property had its own risk profile,” he said. This experience ignited his interest in the potential of geographic risk technologies.
Geocoding, defined as the process of converting an address into its precise location on a map, has become central to insurance risk analysis. Varley emphasized that knowing the exact location of a property, down to its rooftop, is essential for assessing peril risks and property attributes accurately. Addresscloud initially focused on providing geocoding services in the UK and Ireland, using data from sources like Ordnance Survey and Royal Mail. The company has since expanded globally, offering coverage through a network of partner APIs in countries such as France, Australia, and Canada.
Addresscloud has also developed a custom address parser to handle incomplete or erroneous data, improving the accuracy of its geocoding services. The company has mapped over 2.4 billion building footprints worldwide and has fully mapped flood and wildfire risks across mainland Europe, the US, and Canada. Addresscloud plans to expand further into regions such as Australia, New Zealand, South Africa, and South America.
In response to data privacy concerns, Varley stated that Addresscloud does not handle personal data. The company works mainly with private entities, including insurers, banks, and utilities, and partners with commercial data providers for flood modeling and mapping.
Looking forward, Varley anticipates further advancements in geocoding as governments release more accurate data and artificial intelligence (AI) technologies are integrated into the process. AI models are being developed to improve address parsing, which will enhance geocoding accuracy. Geographic risk analysis is expected to become more sophisticated with the incorporation of satellite imagery, sensor data, and detailed building footprints, helping to better assess risks such as flooding and wildfires.
Varley also highlighted the growing use of real-time data in insurance risk assessments, predicting that insurers will increasingly run models earlier in the process, even before issuing quotes. As the industry evolves, regulatory changes are expected to push insurers to adopt a longer-term view of climate risks, similar to the approach already taken by lenders.
Geocoding technology, combined with advancements in data and AI, is helping insurers better assess and manage risks, especially in the face of rising natural disaster threats linked to climate change.
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