Bitesize InsurTech: What3Words

August 27, 2016 Chris Sandilands

What3Words is a new addressing system for the world.

What3Words has built an algorithm which divides the surface of the world into (57 trillion) 3x3m quadrants, each denoted with a unique combination of 3 words.  For example, the entrance to the Oxbow Partners office is at faces.drain.paints.  You can find out where you live by navigating their interactive map (which exists in multiple languages).

Why is this anything other than a bit of fun?

Think how often you use your address: to open a bank account, to register to vote, to hook up to utilities providers, to get things delivered.

Now consider that 75% of the world has “inadequate, poor or no addressing systems”, according to the company.

That makes What3Words a potential game-changer for emerging markets – and What3Words has just been adopted as the national addressing system of Mongolia.  You could easily imagine why What3Words is the future of addressing in Brazil’s favelas or Mumbai’s shantytowns.

So what’s the insurance angle?  By addressing the 4 billion people don’t have an address you open up opportunities for things like microinsurance.

But What3Words is not just an opportunity in emerging markets.  The UK has an unusually good postcode system with 0.05 people per possible postcode combination.  Ireland and the Middle East, on the other hand, have no postcodes and Australia’s four-digit postcodes cover vast areas, as do Germany’s 5 digit codes.  That means, for example, that UK postcodes give insurers a pretty good idea of flood exposure, whilst German insurers know much less.

Another insurance application might be for rural property.  What3Words serves as more convenient way to communicate detailed location information (think: my ranch is at 37.834334, -96.022779 vs. plastic.circulars.resize).

Whilst insurance is not What3Words primary target industry, it’s easy to see why their system could be helpful for an innovative player in the industry. adfdaf

Disclaimer: Chris Sandilands has a tiny amount of equity in What3Words.