Mar 18, 2021

15 States: CAPE reaches insurance pricing milestone for its geospatial property attributes

Regulatory approval across nearly a third of U.S. states demonstrates the impact and utility of CAPE geospatial data in improving insurance pricing

Today, CAPE Analytics, the leader in AI-powered geospatial property intelligence, is announcing a significant milestone in the use of its property attributes for insurance policy pricing across the United States. The company, in partnership with its insurance carrier customers, has now been included in 15 approved rate filings with state Departments of Insurance (DOIs). With these rate filings in place, insurance carriers operating in these states can now use the most accurate and recent property data available to build models that provide their customers with the right coverage at the right price. 

Accurately pricing risk is at the core of every decision insurance carriers make to write or renew a policy. Risk signals, such as those that assess property condition, are critical inputs into actuarial models. Today, however, many carriers must rely on using outdated or inaccurate property data that does not take condition into account to build their rate plans, which adversely affects their ability to precisely price risk. Imagery-based insights provide recent, loss-predictive property characteristics that can be relied on to price home insurance policies far more effectively than the current market standard. 

To date, CAPE Analytics’ property attributes such as roof condition, tree overhang, roof geometry, roof covering material, and structure area have been included in DOI-approved rate filings. Rigorous retrospective analysis across millions of aggregate years of carrier-contributed loss data have proven the predictive power of these attributes, which supports their use in developing more accurate pricing models. For example, a CAPE-led analysis found that severe and poor condition roofs have two-and-a-half times the wind/hail claims frequency as excellent roofs. Additional findings demonstrate the predictive power of tree overhang detection; homes with a large amount of foliage overhanging a roof experience 90% higher wind-related losses.

CAPE Analytics is working hand-in-hand with its innovative carrier partners to file geospatial property attributes across the United States, with many more DOI approvals slated to occur in the coming months. Today, carriers are already using proprietary CAPE data attributes, such as roof condition and tree overhang, for granular rate segmentation and home insurance pricing in the following states:

  • Arizona
  • Colorado 
  • Iowa
  • Kentucky
  • Illinois
  • Indiana
  • Michigan
  • Mississippi
  • North Carolina
  • Ohio
  • Pennsylvania
  • South Dakota
  • Tennessee
  • Virginia
  • Wisconsin

“At CAPE, we’re proud to have pioneered the use of geospatial analytics in insurance—first in underwriting and now in rating. Though generic AI models are increasingly available, the real power of AI in insurance comes with a dedicated focus on building models that are aligned with customer workflows, on successfully segmenting risk, and, finally, on impacting a carriers’ specific loss experience. We’re very pleased to support our customers as they use geospatial analytics, such as CAPE’s roof condition rating, to develop next-generation pricing models,” said Ryan Kottenstette, CEO and Co-Founder at CAPE Analytics.

New Risk Signals Improve Insight into Roof Claim Potential