The primary two pillars are properly understood and deeply embedded in insurer fashions. The third ‘place’ has at all times mattered too, however the knowledge now obtainable provides us the chance to grasp it in far better 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 ranking tables. However past their use in pricing, postcodes also can assist reply an even bigger strategic query: the place else ought to we develop?

If you realize which elements of your e-book 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 focusing on these areas, insurers can develop their footprint with better precision, backed by proof fairly than assumption.

Why Lookalike Geographies Matter

The UK motor market is fiercely aggressive. Switching charges are excessive, margins are skinny, and new enterprise progress is tougher than ever to attain. Conventional levers, adjusting ranking curves, tweaking acquisition spend, or opening new channels, solely transfer the needle to date.

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 threat is genuinely decrease or greater.

And since geography is rooted in real-world elements, the logic is less complicated to elucidate 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 indicate not solely how the market costs particular person threat elements, but in addition how these elements work together. Apollo helps quantify the energy of relationships between options, for instance, how geolocation indicators 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 indicators.

By linking them, insurers cannot solely benchmark their very own strategy towards 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 Threat

What does this appear like in apply?

When constructing a richer image of threat, Atlas doesn’t depend on single indicators. 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 total rating, however particular parts like long-term unemployment or transport availability.

Accessibility of providers – 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 kind, council tax band, and property values.

Transport and highway atmosphere – car possession, commuting modes, highway community high quality, and historic collision knowledge.

Taken collectively, these options create a multi-dimensional fingerprint of place.

As a result of Atlas threat 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 like your finest clients on paper; they behave like them in apply.

From Correlation to Confidence

The energy of Atlas lies in the truth that its scores should not summary constructs. They’ve been proven to align carefully with real-world loss outcomes. Larger Atlas threat 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 understanding that the profile they’re focusing on has already been demonstrated to align with higher threat.

Rigour Behind the Mannequin

Atlas wasn’t constructed by merely throwing knowledge right into a mannequin. It was rigorously engineered:

Over 200 options from trusted, official sources (ONS, DfT, Met Workplace, Land Registry, DVLA, police knowledge).

Options grouped into domains like commuting, housing, crime, climate, and affluence.

Translated into 50 calibrated threat buckets, capturing gradations of threat throughout the UK postcode system.

Crucially, we used explainable AI instruments and cluster evaluation to interrogate the relationships throughout the knowledge. 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 threat 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 Development

With Atlas and Apollo, insurers achieve greater than two fashions. They achieve a framework for progress via geography:

Outline the profile of shoppers 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 threat elements.

Map postcodes that share comparable profiles, your lookalike geographies.

Broaden your footprint with confidence, supported by proof that’s each predictive and explainable.

This isn’t about changing current approaches. It’s about enriching them with new readability, and increasing them into a brand new dimension of progress.

From Footprint to Future

Motor pricing will at all times be concerning the individual, the car, and the place. With Atlas and Apollo, insurers now have the instruments to grasp “place” in better depth than ever earlier than and to make use of that understanding not only for pricing, however for progress.

Lookalike geographies flip postcodes into prospects. And with threat 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.