Geospatial Intelligence Data: The Power Behind Smarter Subsidence Risk Assessment

Geospatial Intelligence Data: The Power Behind Smarter Subsidence Risk Assessment
By Caroline Elliott-Grey, Senior Product Manager, UK & Ireland, LexisNexis Risk Solutions

While many of us have enjoyed a dry and sunny spring this year, a distinct lack of rain does not bode well for the insurance sector and customers with properties prone to subsidence. On the back of a winter when southern England saw 153% of average rainfall[i], we could have the perfect conditions to trigger the shrink-swell cycle that causes subsidence.

Subsidence is most frequently caused by the drying and shrinking of clay soils in hot, dry conditions. Trees can exacerbate the problem by drawing moisture from already dry ground creating further shrinkage, damaging the foundations of nearby properties. When this is followed by extended periods of wet weather, the same soils expand, again, shifting foundations and causing structural damage. As worldwide climate trends become more erratic and extreme, that threat is set to increase.

In response, insurance providers are turning to geospatial intelligence data — location-based data that exposes environmental and structural risk at the individual property level or across a whole portfolio to provide an immediate understanding of exposures and accumulations. Due to subsidence’s highly localised nature, postcode-level risk analysis is no longer sufficient. Insurers need precise, property-level information in order to get a proper grasp of and value the risk.

Based on data from the British Geological Survey, LexisNexis® Risk Solutions predicts that by 2050, an additional 1.2 million homes throughout England will be at risk of subsidence[ii]. Areas like the Oxford-Cambridge Arc, with a mix of clay and chalk soils, are most at risk—yet these areas are the focus for mass housing development.

Monetary stakes are growing. From 2016-2024, flood and subsidence claims rose by 58%, and policyholders are now paying an additional average of £318 annually for their policy[iii]. More recently, subsidence claims amounted to £54 million in Q2 2023 and by Q3 2024 had increased to £66 million, a 61% year-on-year rise[iv].  Insurance claims for subsidence damage and remediation have a tendency to reflect delayed damage from previous seasons and therefore underscore the importance of efficient risk management upfront.

This is where tools like LexisNexis® Map View come into play. By superimposing data regarding soil type, distance to trees, property age, construction materials, and even basement existence, insurance providers can gain a rich view of individual property risk. This supports tailored underwriting, accurate pricing, and better portfolio management. Most crucially, it allows insurance providers to discuss specific actions that can be taken to reduce the risk such as tree maintenance.

The pressure is on. The UK Government has asked for 1.5 million new houses to be constructed by 2030, roughly 300,000 per year[v]. As the land becomes less plentiful, more and more developments will likely be approved on ground that is subject to subsidence risk. This makes data-driven risk assessment more critical than ever.

Geospatial intelligence data is fast becoming an increasingly important weapon in the battle to counter creeping subsidence threat. It allows insurers to stay one step ahead of environmental change, protect their portfolios, and provide more informed discussion with customers and planners alike.

[i] https://www.metoffice.gov.uk/binaries/content/assets/metofficegovuk/pdf/weather/learn-about/uk-past-events/summaries/uk_climate_summary_winter_2024.pdf

[ii] This risk has been illustrated by British Geological Survey data with cutting edge analysis and expertise in data applied by LexisNexis Risk Solutions (LNRS), part of data & analytics giant RELX plc. The analysis highlights risk areas while accounting for a wide range of geological, weather and climate data.

[iii] https://www.gocompare.com/home-insurance/subsidence-and-home-insurance/impact-of-extreme-weather-conditions/#subs

[iv] https://www.abi.org.uk/news/news-articles/2023/9/home-insurance-payouts-up-11/https://www.abi.org.uk/news/news-articles/2024/112/year-to-date-property-claims-payouts-hit-4.1-billion/

[v] https://www.gov.uk/government/publications/new-homes-fact-sheet-1-the-need-for-homes/fact-sheet-1-the-need-for-homes