When is a Road a River? - AXA Insurance

Phoenixtp

Hi All

A heads up as I'm sure the following might affect many and to ask the community for advice.
  
I was refused house insurance by Axa. Axa said this was due to their Flood Risk Map which they use. However, on scrutiny the Flood Risk Map is clearly wrong as it shows a road close to my house as being a river and a river which lies further away as a road!  I can imagine some poor soul on a Friday afternoon using Google Maps to annotate knew there was a river somewhere and got confused by a road with a wet surface whilst the river is hidden by a tree canopy.  

It is a steep valley there is no flood plain, it really is as simple and clear cut as this. (Indeed the Environment Agency shows the risk of flooding as their lowest category 1:1000 years.)

Axa were asked to rectify and photos submitted as proof. However, unbelievably Axa refused on the basis that whilst they paid for this map they had no control over its accuracy. (As an aside, Axa also advised that they had been unable to quote under the Flood Re scheme as there was no date when the property was built. However, speaking with Flood Re they said this was total rubbish and a date did exist.)

I just don't believe this is good enough. Axa a regulated and supposedly professional company are knowingly and willingly using wrong information and refusing to correct it or seek to get it corrected.  

Yet, perversely we are bombarded by warnings from Insurers on their websites and pre recorded telephone messages, on the importance of the absolute accuracy of the information we provide!

One rule for one...

I know there are different insurers but I was surprised to learn that ... other Insurance Companies on Comparison Sites amend their premiums and willingness to quote on the basis of other Insurers decisions. So the incorrect information which Axa is using is having a real financial and availability impact whether I use them or not.
 
I took this up with the Financial Ombudsman who acknowledged that there did appear confusion over the road and river but upheld Axa's decision as the problem lay with the 'data providers - not Axa'. 

I have asked numerously for the data providers' details but of course, they have not been forthcoming. 

It's not the fact that Axa are refusing to quote.  I am left in what I think is a ludicrous position of a road being shown as a river and a river being shown as a road. It's acknowledged.  No one disagrees - it's a fact - one which you can walk on and for all to see, but I cannot put it right. Even with something as clear and irrefutable as this protections are not in place to rectify. Honestly, I think it shows a real arrogance which thumbs a nose at consumers. It got me thinking how many more errors there were out there, with people wrongly being denied insurance, a fair premium or proper protection. 

So now I guess I know when a road is not a road but a river. 

Hasbeen

Go with another insurance company.  

Phoenixtp

Thank you Hasbeen.  But It affects both the premiums and availability with other Companies. 

Sandtree

I'll admit its been a while since I dealt with the sale of mass market consumer insurance products but I was slightly confused by your comment that "other insurance companies on comparison sites amend their premiums on the basis of other insurers' decision"?

Insurers gather data from a variety of sources, including you, and base their premiums on the amalgamation of this data and their experience of other individuals in similar circumstances (and also the experience gathered by other companies when it comes to natural catastrophe like flooding). Inevitably this data is on occasions imperfect but it can go both ways. 

RMS is the largest global provider of natural catastrophe modelling software to insurers, a few years ago it was by a long way but their dominance (and subsequent pricing) has made some question. I've dealt with their software three times in the commercial insurance space, one insurer took it as is, one insurer increased the values it output as they felt it too optimistic on incomplete data and the other universally reduced the values as they found it too pessimistic in comparison to their experience. This goes to show even when there isn't out and out errors that underwriting is an art not a science.

Pricing is ultimately a commercial decision and unless it strays into an "ism" then insurers can charge as much or little as they want and their methodology doesn't have to be exposed. RMS, EquiCAT and AIR are probably the largest global providers of data in size order but there are specialist players in individual territories (eg RMS didn't used to have a flood model for Ireland and some will use the Environmental Agency data in the UK).

Phoenixtp

Hi Sandtree, thank you for taking time to respond. I do very much appreciate it. It was an Insurance Broker who actually advised that when one company refuses to provide an insurance quote on a comparison website, some other insurance companies simply will follow suit. 
For me it's not so much to do with the pricing nor whether they provide a quote or not.  I understand it's a commercial decision. I even accept they don't have to provide a rationale for it (but they did - the map!) If once the information had been corrected they still refused to provide a quote, so be it.  
For me it's the fact that the information they hold and use is irrefutably wrong and they are refusing to correct it. There also seems a lack of recourse to correct. Surely if a bank held and used incorrect factual information from whatever source they'd be made to change it?
Your information on RMS, Equicat and AIR is brilliant. 

Sandtree

In my day on consumer products aggregators only used to give the insurer two things... the premiums of the top 3 "bidders" and the ranking they achieved in the whole list but these were only provided after all "bids" were in. Naturally these are commercial companies however and it may well be that for an increase in fees they may allow some to delay their bid and provide insight to of the ealier bidders. I'd be a little surprised if this is happening but wouldn't rule it out. There are other complexities too when multiple companies use the same cloud based software who cannot react to others using different software but may be able to react to others using the same software.

You are ultimately talking about a product that is fundamentally "the computer said no" though. Its not like a contact centre agent can go into the model, redraw the path of the river and the software then recalculates the premiums based on the revised data. When issues are found the matter is taken up with the model provider and ultimately everyone has to wait for them to update the model - and this was a fairly infrequent event and even longer before insurers adopt them. Some may have the capacity to make out of model adjustments but you have a cost -v- reward consideration (and the governance required to show you are writing high enough premiums). If you are paying a £10m+ premium a year you probably will have the sway to do this, if you are paying £500 then you're more likely to get better results by shopping around. 

davidmcn

If it's a steep valley is the problem not perhaps (or also) that there's a nearby river, and their algorithm doesn't take account of the difference in height? I once had insurance refused for a property on a road about 100 feet above a river.

Thrugelmir

Where do the natural springs lie? Water can flow from the most unexpected places. 

Phoenixtp

Thank you Davidmcn and Thrugelmir.  You'd think it would have to be a reason like either of you suggest as the current situation makes no sense. However, As a bit more background I've seen the actual Flood Risk Map extract.  There are no springs and it is the road which is actually being shown as the river (pixilated blue). The river which lies some distance away, is not being shown as a river at all.

Phoenixtp

Hi Sandtree, yes money does talk. However, I do think with Companies whose profession is either Insurance or particularly Data Handling and Modelling there would be a willingness to be accurate and own up and correct mistakes. After all its their reputation. And in this case it's a fairly obvious mistake being made. 
With all your experience you mentioned some providers above. I have some very blurred writing which perhaps says 
'COWL A/S DigitalGlobe G.........   ...  In........ Ltd'. Does this ring any bells?