October 17th - 19th, 1999
Hyatt Regency Baltimore, MD

E-Underwriting:
William J. Ashley, Executive VP,
E.W. Blanch Co.
Monday, October 18th, 9:00-9:50 a.m.

"Insurers Turn to Eye in the Sky"

The next breakthrough for Internet-based insurance won't just be creating more "dot-com" businesses, but a radical rise in the ability to instantly share and update underwriting information, William J. Ashley, an executive vice president with E.W. Blanch, told insurers.

Ashley heads the EWB Technology and Risk Management unit of Blanch, which is compiling online a photographic and statistical database of homes and neighborhoods in selected geographic regions. The project already has developed an aerial and front-view database of homes in Palm Beach County in Florida, and it expects to make that data available beginning in mid-November, Ashley said.

Blanch units and partners also recently photomapped parts of Oklahoma affected by tornadoes, which shows how insurers will soon know instantly which homeowners are likely to have a claim. "When was the last time your adjuster called and said, 'I think you have a claim on your house?'" Ashley asked. "That may sound like a joke but it's not."

Ashley spoke at "Continuing the E-Volution," A.M. Best Co.'s annual Insurance Information and Technology Conference, in Baltimore. The conference continues through Oct. 19.

In Ashley's view, the next breakthroughs will come as insurers use before-and-after photos and data to determine which policyholders were affected by disasters, to prioritize among potential claims, and to help control fraud. For instance, the photos show who has a pool, where the nearest fire hydrants are located, and whether owners have structures such as carports and outbuildings. Using this data means premiums can be generated on an individual basis.

Ashley said some insurers mistakenly believe policies are profitable if homes escape damage in a catastrophe. But factoring in not only catastrophes, but also risks of fire, crime, arson and other losses shows that many policies considered profitable are the reverse, he said. "Right now, it's one lump premium for everything."

Within five years, EWB and its partners hope to include 45% to 50% of the populated United States in the photomapping database. Ashley predicted that individual photos and reports would probably cost insurers between $8 and $12, although many companies may elect to buy on a contractual basis. The photos will likely be updated every two years.

"This is not Star Wars stuff," Ashley told the audience of insurance leaders and technologists. "These are products that are here now. We're looking for industry support to move these out."

By Lee McDonald
Executive Editor