Experian UK&I today announces a new AI-powered data solution ‘Hazard Tags’ which will help transform underwriting processes in the commercial insurance sector.

Manual underwriting methods can be time-consuming for insurers and can often lead to a lack of clarity over key questions that are pivotal for accurate risk rating and quote pricing, as businesses expand and change their operations over time to reflect market demand.

Now thanks to a new collaboration with business data aggregator Veridion, insurers and Managing General Agents (MGAs) will benefit from a significantly streamlined underwriting process - reducing the need for manual data gathering - and an improved claims processing and quotation journey.

By using advanced Artificial Intelligence and Machine Learning techniques to analyse billions of internet pages almost instantly, the solution identifies any changes to business activity, risk exposure, and products and services, enabling accurate premiums and coverage to be calculated.

Hazard Tags, which identifies risk keywords through the analysis, can be combined with industry classifications such as SIC, NACE, and NASIC, giving commercial insurers an enhanced, true profile of the business. It reduces the risk of misclassification within the insurer’s portfolio which can cause significant losses in revenue.

Recent analysis by Experian UK&I found that more than half of a large commercial insurer’s polices were misclassified by traditional classifications, costing the company an estimated £6bn in lost premiums. 

David Gallihawk, Chief Product Officer, Business Information, Experian UK&I, said: “Artificial intelligence and machine learning is transforming the world of work in countless ways, and the financial services sector is no different. 

“Traditional SIC codes may not accurately reflect mixed business operations, for example breweries that also function as bars and restaurants or construction firms that handle hazardous material like asbestos. That’s the issue that Hazard Tags solve. 

“Increased automation means improved efficiency, and in the case of insurance, means more accurate up-to-date information so underwriters can get a comprehensive view of clients and price accordingly.”

Florin Tufan, co-founder and CEO of Veridion, said: “In partnership with Experian, Veridion leverages AI to build comprehensive business profiles, accurately identifying activities and exposures from a company's digital presence. 

“This provides insurers with detailed insights for precise risk evaluation and informed decision-making.”

The launch of Hazard Tags builds on Experian UK&I’s Business Activity Tags and Business Descriptions classifications, which enable better, more accurate risk assessment and classifications of businesses.