The primary two pillars are effectively understood and deeply embedded in insurer fashions. The third ‘place’ has all the time mattered too, however the information now obtainable offers us the chance to know it in far larger depth. Geography is greater than only a location marker. It’s a lens into behaviour, atmosphere, and publicity.
From Postcode to Prospect
Postcodes have been a basis of UK insurance coverage pricing for many years. Each insurer already elements them into score tables. However past their use in pricing, postcodes may also assist reply a much bigger strategic query: the place else ought to we develop?
If you already know which components of your guide carry out strongly, the pure query is: the place else seems to be like this? These are your lookalike geographies, postcodes that share the identical environmental and socio-economic profile as your finest clients, even when they’re exterior your present quoting footprint.
By figuring out and concentrating on these areas, insurers can develop their footprint with larger precision, backed by proof slightly than assumption.
Why Lookalike Geographies Matter
The UK motor market is fiercely aggressive. Switching charges are excessive, margins are skinny, and new enterprise development is more durable than ever to realize. Conventional levers, adjusting score curves, tweaking acquisition spend, or opening new channels, solely transfer the needle to this point.
Lookalike geographies provide one other lever. By specializing in postcodes that mirror the situations of your strongest-performing segments, insurers can:
- Goal market entry with extra confidence.
- Information dealer growth in direction of high-potential areas.
- Help pricing technique with clear proof of the place danger is genuinely decrease or greater.
And since geography is rooted in real-world elements, the logic is less complicated to clarify throughout the organisation, from pricing to distribution, and from underwriting to compliance.
Apollo + Atlas: A Mixed Lens
At Client Intelligence, we mix two complementary capabilities to unlock this chance:
- Apollo – our machine studying pricing engine, constructed with explainable AI instruments to point out not solely how the market costs particular person danger elements, but in addition how these elements work together. Apollo helps quantify the power of relationships between options, for instance, how geolocation alerts mix with driver traits or car attributes to form aggressive pricing.
- Atlas – our postcode enrichment mannequin, which describes the atmosphere round every postcode utilizing over 200 engineered options.
Collectively, they supply insurers with a twin view:
- Apollo exhibits how the market costs geography and the way it interacts with different elements.
- Atlas explains why geography issues by revealing the underlying alerts.
By linking them, insurers can’t solely benchmark their very own method in opposition to the market but in addition establish new postcodes with the identical profile as their finest clients. That’s the essence of lookalike geographies.
Constructing a Richer Image of Danger
What does this appear to be in follow?
When constructing a richer image of danger, Atlas doesn’t depend on single alerts. It layers collectively a number of dimensions of the atmosphere:
- Who lives within the space – age distribution, family composition, training, employment.
- Deprivation indices – not simply an general rating, however particular parts like long-term unemployment or transport availability.
- Accessibility of companies – proximity to GP surgical procedures, hospitals, or key facilities, which affect commuting and driving patterns.
- Affluence and socio-economic standing – indicators of economic stability and family resilience.
- Housing and property combine – family measurement, property sort, council tax band, and property values.
- Transport and highway atmosphere – car possession, commuting modes, highway community high quality, and historic collision information.
Taken collectively, these options create a multi-dimensional fingerprint of place.
As a result of Atlas danger scores correlate strongly and linearly with noticed loss expertise, this enrichment isn’t simply descriptive, it’s predictive. Which means lookalike geographies don’t simply appear to be your finest clients on paper; they behave like them in follow.
From Correlation to Confidence
The power of Atlas lies in the truth that its scores will not be summary constructs. They’ve been proven to align intently with real-world loss outcomes. Greater Atlas danger scores translate into greater noticed loss ratios, and decrease scores map to decrease losses.
This predictive energy turns enrichment into motion. It permits insurers to develop into new areas figuring out that the profile they’re concentrating on has already been demonstrated to align with higher danger.
Rigour Behind the Mannequin
Atlas wasn’t constructed by merely throwing information right into a mannequin. It was fastidiously engineered:
- Over 200 options from trusted, official sources (ONS, DfT, Met Workplace, Land Registry, DVLA, police information).
- Options grouped into domains like commuting, housing, crime, climate, and affluence.
- Translated into 50 calibrated danger bucketscapturing gradations of danger throughout the UK postcode system.
Crucially, we used explainable AI instruments and cluster evaluation to interrogate the relationships throughout the information. This helped us perceive why sure options are predictive, not simply that they’re.
For instance, when inspecting classes of crime, it grew to become clear that some indicators of social atmosphere are extra predictive of danger than others. It’s not about easy correlations, it’s about constructing a clear story of why geography issues. That transparency is important for each pricing and governance.
A Framework for Progress
With Atlas and Apollo, insurers acquire greater than two fashions. They acquire a framework for development by way of geography:
- Outline the profile of consumers or areas that ship stronger outcomes.
- Benchmark how the market costs those self same options, together with the way in which geography interacts with different danger elements.
- Map postcodes that share comparable profiles, your lookalike geographies.
- Increase your footprint with confidence, supported by proof that’s each predictive and explainable.
This isn’t about changing present approaches. It’s about enriching them with new readability, and lengthening them into a brand new dimension of development.
From Footprint to Future
Motor pricing will all the time be in regards to the particular person, the car, and the place. With Atlas and Apollo, insurers now have the instruments to know “place” in larger depth than ever earlier than and to make use of that understanding not only for pricing, however for development.
Lookalike geographies flip postcodes into prospects. And with danger scores that correlate to loss, they flip prospects into worthwhile clients.
From footprint to future, that is the subsequent step in making insurance coverage pricing not solely extra predictive, however extra commercially highly effective.
