AXA Hong Kong and Macau wins Big Data - Insurance category at HKB Technology Excellence Awards 2022

The company raises awareness of climate change and environmental protection through its Go-Green home insurance campaign.

Insurance firm AXA Hong Kong and Macau (“AXA”) bagged the Big Data - Insurance category at the recently held Hong Kong Business (HKB) Technology Excellence Awards 2022 for its ESG-related home insurance campaign that utilised big data techniques.

The prestigious awards programme honours outstanding companies that have made exceptional contributions in the pursuit of technological innovation in Hong Kong.

The idea of the GO GREEN home insurance campaign started with the exploration of open data’s value, such as energy consumption and weather, as well as how this can be leveraged to find any correlation with claims risk.

Throughout the processes from ideation, design, prototype, and analysis, the company’s data science team worked closely with different teams, including pricing, underwriting, and claims, to get their collective inputs, and then use open data to be applied to data science techniques.

This is to carefully analyse the significant factors, then successfully conclude the discovery of a correlation between claims risk and energy consumption, and further facilitate the formulation of the green score.

Moreover, AXA first explored the existing home claims data by text mining to understand the claim types to find the linkage between home claims and energy consumption. It found a potential causality between home claims and energy consumption, which can be leveraged using external energy consumption and weather data from the Hong Kong government's open database. 

AXA tested the hypothesis that the longer stay-at-home due to COVID could lead to higher home energy consumption, hence higher claim frequency, as well as if there would be any weather factors also affecting home energy consumption level at the same time.

It was able to successfully identify those significant features, including temperature, rain, sunshine, gas consumption, and electricity consumption. Overall, a positive correlation between home claims, energy consumption, and a few weather factors is mathematically proven.

With the hypothesis results, it formulated an integrated Green Score for each individual household and leveraged a tree-based machine learning algorithm to indicate the “green” level of households. 

AXA further suggested businesses prepare different pricing models to cater to different claim scenarios amidst the discovery. To facilitate this pricing approach and the hypothesis result, it also formulated an integrated Green Score for each individual household by selecting some property-related and census-related features from over 300 features from our external real estate database. 

The Green Score may indicate the “green” level of households and is of high significance as recommended by the machine learning algorithm.

“Our Green Home programme is a key first milestone where we have brought together the power of open data, advanced data modelling and risk pricing to develop a new proposition where our green score predictive model allows us to reward consumers for climate-friendly behaviour and better self-regulated risk management,” said David Ng, Chief Strategy, Digital and Data Officer for AXA Hong Kong and Macau.

The Hong Kong Business Technology Excellence Awards is presented by Hong Kong Business Magazine. To view the full list of winners, click here. If you want to join the 2023 awards programme and be acclaimed for your company's outstanding contributions in pursuit of technological innovation, please contact Julie Anne Nuñez at [email protected].