Product Focus – Escape of Water

perils and escape of waterEscape of Water (Non Freeze) claims currently account for around 25% of domestic claim costs, so having an accurate measure of escape of water risk is vital for insurers.

The cost of insurance claims resulting from escape of water claims such as plumbing equipment failure, and burst pipes and leaks can be significant.   Business Insight’s Escape of Water (Non-Freeze) model has been designed to predict the relative risk of escape of water claims across the UK.

Working closely with a number of insurers and data partners, Business Insight has utilised PhD level mathematical modelling to analyse highly detailed datasets against historic claims patterns to estimate risk by postcode. Over 100 million data records, 26 million properties, 1.7 million postcodes and heavy computing power has resulted in the most detailed project undertaken into this type of insured peril in the UK insurance industry.

Comprehensive information relating to property, the typical demographic make-up of the street and other key predictors has been combined to more precisely calculate the risk of an escape of water claim.  The output provides insurers with a deeper insight into the risk of an escape of water claim for enhanced risk selection and better pricing accuracy.

The model has been independently validated by a number of insurers against their experience data and has shown a high degree of predictive discrimination and potential for use as a rating factor.

Benefits include:

  • Better assessment of risk by location.
  • More precise pricing and rating.
  • Gaining insight into postcode areas where you have no experience data.
  • Discovering where you need to modify your rates to reduce exposure in higher risk areas and to optimise your profitability.

To find out more, please contact us on 01926 421408.