Ask Kodiak Improves Commercial Insurance Risk Classification
New methodology provides for high-definition classification of business type or function based on text sub descriptions for NAICS codes.
BOSTON, Sept. 10, 2020 (GLOBE NEWSWIRE) -- Ask Kodiak, an API platform providing real-time appetite and eligibility for commercial lines insurance companies, agents, and brokers, is pleased to announce the release of a new industry standard which provides more accurate, detailed classification of commercial insurance risks.
Building on the North American Industry Classification System (NAICS), the Ask Kodiak High-Definition standard (NAICS HD) makes the more than 20,000 sub-descriptions beneath the NAICS national industry-standard codes directly addressable for insurer appetite. NAICS HD is available immediately at https://naics.askkodiak.com.
Commercial insurer appetite indexed on the Ask Kodiak Platform is based on NAICS, the replacement for the Standard Industrial Classification (SIC) System first introduced in 1997. Updated every five years, most recently in 2017, NAICS relies on a six-digit hierarchical code structure to identify a business’s primary function and which insurers use to determine the nature of any given commercial insurance risk. NAICS is superior to other classification systems for expression of commercial appetite ecause of its comprehensive coverage of the modern economy. Unfortunately, many insurers are not fully utilizing the detail provided by NAICS.
The importance of proper classification of risks cannot be overstated, as it not only helps determine appetite, but also drives underwriting profit for insurers. Ask Kodiak’s new industry standard for high-definition classification of commercial insurance risks utilizes all levels of the NAICS hierarchy, up to and including the sub-descriptions associated with six-digit national industry codes.
“Insurance companies rely on profits in order to operate and grow,” said Michael Albert, co-founder of Ask Kodiak. “But, underwriting profits are difficult to realize when books of business are badly mis-classified. So often, I see risks classified as ‘not otherwise classified’ or NOC, which is just insane. Insurers are in the business of managing risk, yet they use a catch-all rating code to classify them. What exactly does the insured or potential insured even do? This new standard adds a level of precision to classification that was not previously possible.”
Ask Kodiak has also built a business practice helping insurers convert legacy and rating classification models to NAICS HD using the industry’s most comprehensive mapping dataset. And, for greater semantic precision Ask Kodiak utilizes text descriptions, not numeric codes, for mapping to other legacy classification taxonomies.
This new industry standard amplifies the accuracy with which the cloud-based Ask Kodiak Platform is able to help commercial and specialty insurers organize and market appetite and eligibility to independent agents and brokers in real-time across channels.
Insurers can view industry mappings, browse the latest NAICS edition manual, and navigate to a six-digit code or lower in the hierarchy here.
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