Analytics for Insurance

Chapter 7Property Insurance

For the great majority of homeowners their experience of insurers at the moment of claim will be relatively minor. Perhaps a modest dent to their vehicle, a burst pipe (although in fairness, a burst pipe can be dramatic) or a few displaced roof tiles. They are the lucky ones. For the rest, perhaps their first experience of the claims process will be when their home has been burned to the ground, flooded or, in the case of the UK insurance market, has suffered major cracking as a result of ground movement such as subsidence damage. All these are traumatic and usually expensive events, sometimes technically difficult both from a property and from an insurance point of view, emotionally upsetting and all need to be handled accordingly.

At a time when emotions can run high the insurer will often attempt to empathize with a policyholder. This can be difficult as often the claims handler will never have suffered anything quite as dramatic in their own lives. It is impossible to understate the policyholder's emotion which is sometimes comparable to a bereavement. The loss of many or even all of a family's personal possessions can be a very painful event. These may include wedding photos, family documents and heirlooms. Often the incident may be accompanied by guilt – ‘Did I really leave that cooker on?’

Insurers also need to view matters objectively. It became apparent through observation rather than analysis that where a pet owner deliberately set fire ...