Reliable prefill data helps boost homeowners underwriting confidently

April 7, 2022 / 4 min read

No one likes telling a homeowner their quoted premium is going up before a policy is even bound.

Suppose a new homeowner gets an initial quote from an agent with coverage estimated at $600,000. But before the agent can bind the policy, the homeowner fills out a form that shows the year the home was built was off in the initial application. Now the estimated home value adjusts to $650,000. Just a month later, a home inspection reveals a primary bedroom and bath addition over the garage bumped up the living area by 500 square feet. The estimate increases to $800,000, with a corresponding hike in the premium.

These changes in home value and insurance premiums can spoil the customer experience and lead to lost business.

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SmartSource now delivers a 100 percent hit rate for U.S. addresses, up 10 percent from last year.

Getting a quote right the first time starts with the right data, right away. Today’s tech-savvy consumers expect their insurance carriers to deliver a bindable quote at the click of a button. Providing that seamless experience means insurers need instant access to reliable data about the critical property characteristics that can drive coverage, premiums, and claims.

Stronger data starts with robust prefill

Up-to-date and smart data about the age of a home and the size of the living area provide the backbone of a reliable replacement cost estimate. Without confidence in those two figures, a replacement cost estimate may not be as reliable.

Verisk is taking action to help insurers get access to more of the critical underwriting information they need at point of quote. By equipping insurers with insight into the quality of their prefill data, they can be confident their decisions are backed by the most reliable information available.

Through 360Value^®, SmartSource^® allows insurers to enter an address and get back insurance-ready, property-specific information on multiple key property characteristics—including year built and square footage—for more than 124 million U.S. residential properties.

Continually improving the accuracy of this information requires machine learning and artificial intelligence (AI) to double-check the data. This innovative method delivers prefill that gets smarter over time by choosing the most reliable source for each property characteristic. And now there is an additional layer of backing to the data. Confidence scores on key property characteristics are now available to help insurers underwrite with a more nuanced understanding of the data they rely on for decision-making.

Data for every address, every time

Delivering a seamless transaction to consumers is only possible if an insurer gets a “hit” when they provide the address for the home requiring coverage. While traditional prefill might only be available for 80 percent of properties, getting to 100 percent is necessary to truly revolutionize the quoting experience.

SmartSource now delivers a 100 percent hit rate for U.S. addresses, up 10 percent from last year. Verisk achieved this milestone by using sophisticated modeling to provide year built and finished square footage for addresses where that information was not previously available. Verisk leveraged analytics, multiple data sources, and known property characteristics within geographical proximity of the address requested.

Current data drives reliable estimates

Robust prefill for every home can help streamline personal property underwriting, but only if current data backs it. Responding to an increasingly volatile market for building materials and labor, Verisk updates pricing data monthly to better reflect today’s market realities.

While reconstruction costs historically have risen from 2 percent to 4 percent annually, the pandemic shifted the supply-and-demand equation. Ongoing labor and materials shortages mean that 8 percent increases in reconstruction costs have become typical. The rising price of lumber alone has added nearly $30,000 to the average price of a new single-family home.

Keeping current with volatile price swings that drive reconstruction costs can help prevent surprises for agents and homeowners and help better align estimates to the actual cost of rebuilding a home.

A digital-first experience

The most time-consuming part of quoting a new homeowners policy is often crafting a replacement cost estimate, which may take up to half the underwriting effort. Skimping on this step isn’t a viable option, as a reliable replacement cost helps avoid underinsurance, premium leakage, and customer defection.

Carriers seeking to win business from today’s digital-first shoppers know that delivering faster, more durable, quotes is only possible with reliable data. SmartSource in 360Value provides insurers with the tools they need to underwrite with confidence using current and comprehensive data.