Location Intelligence, Spatial Data Analysis | Pitney Bowes

How location intelligence is reshaping three different industries

The fields of insurance, financial services and public sector are increasingly using geospatial data to gain a competitive advantage

Over the past few years, the use of geospatial data for consumer applications has boomed. People now wear watches that track their running routes and mileage, use navigation devices and applications in their cars for directions, and check their phones to locate everything from nearby restaurants to doctor’s offices and pharmacies.

Increasingly, enterprises are getting in on the action, too, using location intelligence tools to make business decisions and better serve their customers. Managers in a wide variety of fields are coming to understand the competitive advantages that come with the savvy use of geospatial data. This trend is proving particularly true for those businesses in the fields of insurance, financial services, and public sector.

From Reactive to Proactive in Insurance

Location intelligence tools can help insurance carriers in a number of different ways. They enable insurers to more effectively determine risk when writing policies, allocate resources before, during, and after a natural catastrophe (such as a hurricane), and effectively determine how much capital to keep in reserve to pay out claims after a major event.

Insurers that want to accurately price insurance coverage on a particular house need to know if it’s in an earthquake zone, a flood zone, or in an area that is prone to wildfires. And, if they know a major storm is approaching, they want to know, with precision, how many policyholders that could be impacted.

Products like MapInfo Pro, which allow users to visualize geospatial data, have revolutionized the way insurance underwriters, actuaries, claims, and marketing professionals utilize the information. While data used to be broken down by zip code, MapInfo Professional lets users drop a pin in a location and then micro-analyze data however they choose—for example, by creating a mile-radius ring around the projected storm path.

As more geospatial data becomes available, insurers are moving away from a “reactive” role of merely assessing damages and paying out claims, and toward a more “proactive” role of helping their customers understand the natural perils and even help prevent damages from occurring in the first place. Carriers can contact their customers who are in the path of a hurricane, for example, and tell them what steps they can take to protect their house. That way, the customer can help limit the damage (such as broken windows), and the insurer can minimize the loss and the payout. If they can mitigate that risk, it makes both parties happy.

Making Informed Decisions and Understanding Customer Profiles in Financial Services

Through the use of location intelligence tools, banks and other financial institutions also can make more informed decisions about their businesses. This can include decisions about where to place branch locations and ATMs, as well as helping to evaluate whether existing assets are achieving their full potential.

For example, a regional manager can select a specific branch in Boston. Through a better understanding of its trade area he or she can assess its relative performance. If the area’s demographic profile suggests that there is $100 million worth of potential business in the area, but the branch is only generating $25 million, further evaluation can be conducted to better understand the shortfall. A regional manager could re-evaluate local leadership, the mix of products/services offered in that branch, better understand competitive positions within the market, and/or reassess the targets for that branch.

Banks and credit card companies can also use location intelligence tools to better detect fraud, and also avoid flagging legitimate charges as potentially fraudulent. As they start to develop profiles of where you shop, that makes it a bit cleaner to anticipate charges that on the surface might seem a bit outside the norm.

These geographic customer profiles are useful for more than just fraud detection. Financial institutions can use geospatial data to electronically send their cardholders special offers when they’re at or near specific stores. Banks and credit card companies may want to help drive additional business to their network of retailers. They can do that by giving consumers incentives to shop at those retailers. Understanding where customers routinely shop and the types of products they routinely buy, enables the financial institution to make targeted offers that create an incentive for the consumer to shop within its network of retailers, while utilizing their credit/debit card.

Influencing Behavior in Public Sector

As providers of critical community services ranging from healthcare to public safety, state and local governments have found numerous uses for location intelligence tools as well.

Some applications, like those that allow citizens to find the nearest state-licensed daycare center, are fairly straightforward. For over a decade, police departments have also used location intelligence tools to make decisions about where to deploy resources to best impact public safety. Rather than making decisions based on data from broad geographic regions like precincts or neighborhoods, departments use location intelligence tools to analyze crime statistics down to the block, street, or intersection level. This detailed analysis allows departments to place officers in the most effective locations.

Other applications are more complex. To combat fraud, waste, and abuse, government entities can use geospatial data to help detect inappropriate spending. For example, a governmental agency might ping a tablet or smartphone carried by home health care professionals to ensure they are within a geographic proximity of the location where they’re supposed to be providing services. Or, an agency could analyze average drive time data for visits to healthcare providers, then use that data to identify any providers delivering services with drive times far outside the norm. Providers attracting patients from far outside their geographic area may then be worth closer examination.

Health agencies can also use geospatial data to promote healthy behaviors, for example, by offering coupons for free vegetables to a Medicaid recipient’s phone when he/she enters a grocery store. If citizens opt-in to certain services, states can influence behavior. It’s something they couldn’t do in a real-time scenario before, and it’s a fairly revolutionary application.

To learn more, watch our video on Location Intelligence that helps companies close deals, manage risk, prevent churn and improve customer service. Read our new white papers on quantifying the risk of landslides, floods and shoreline hazards.  You can also view the webcast: Move Risk Mitigation to Higher Ground.

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