What are the risks of living in a 40-year-old house compared to a near-new one or buying property in one location compared to another?
Providing answers to these and other questions is the aim of a data-driven research partnership under way between the University of Auckland and leading Kiwi insurer, Tower Insurance.
Miles Fordyce, Tower's head of Data and Customer Platforms says the research seeks to establish "greater transparency" around risks people may be faced with when buying property.
"We are trying to better understand what these are so that when customers are in the property market they are aware of both these and potential future risks so they can make more informed choices," he says.
Although researchers are looking at a broad range of risks and trends – including those resulting from climate change – one of the immediate goals is a deeper analysis into the cause of fire in residential property.
"We want to know if certain types of houses are more prone to catching fire and what are the key drivers that cause fire," he says. "Is a 40-year-old weatherboard house more likely to catch fire or not, are the risks greater for properties located further away from a fire station?
"We can make assumptions about these things and some of it we already know, but we need to be able to prove it. At present our data-sets are not as rich as we want and creating more certainty and knowledge is the aim of our collaboration with the university."
The partnership is facilitated by UniServices, a not-for-profit company of the University of Auckland. UniServices champions research and ideas that bridge the world of academia with business and government to build new knowledge and solutions.
Fordyce says although the team is close to finalising its first findings, it is still too early to say what these are: "A lot of it will contain no surprises, but there will be some interesting things coming out of it as well.
"Long term these pieces of work will be extended with a focus on making data available to customers, helping to increase education around risks like climate change and severe weather."
He says understanding trends around the future impact of climate change is also a strong focus of the research: "This is not just around the effect of sea level change but with more frequent storm events, higher air temperatures and so on."
The collaboration will also allow for the geocoding of properties in the Pacific Islands, a region in which, Fordyce says, Tower is one of the largest insurers. This exercise will enable the company to more effectively pinpoint the location of individual buildings so it can better assess the risks from events such as cyclones.
He says the partnership will lay the groundwork for the data-driven future of the New Zealand insurance industry, open up opportunities for the next generation of data scientists and improve the sector's service to customers.
"Understanding future risks will allow us to diversify our insurance offerings to customers and price our products accordingly," he says. "It will enable us to understand risk in more detail and give customers a bespoke experience with a price and offering that suits their needs."
Fordyce says the partnership gives Tower access to "smart people and bright minds" able to look at data in unique and different ways.
Greg Murison, UniServices executive director for Strategic Growth, says Tower is leading the way in New Zealand with initiatives to harness research-driven knowledge and better prepare the insurance industry for the challenges of the future.
He says while Tower has accumulated a trove of data over the years, the joint research activities will leverage data and digital resources to make the process of buying insurance easier and faster for customers.
"In the long run, the relationship between Tower staff and academics will foster the development of the next generation of data science tools in an effort to get the most out of insurance data," he says.
The director of the Data Science Programme at the university, Professor Sebastian Link, says the partnership will also enable students within the programme to embark on projects with specific industry context, provide them with invaluable experience and establish a recruitment conduit for Tower.
"Students will not only develop solutions for technical problems, but also attempt to quantify what the solutions to such problems might imply for Tower's operations," he says. "They will also look into how those solutions flow through to the customer experience.
"The shared vision is to co-create leadership in data-driven decision making within the insurance domain, aligning academic research capabilities with real world industry expertise for the benefit of stakeholders and customers alike."
For more information visit tower.co.nz