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Escape of water - managing the rising indemnity spend: Polygon’s perspective

The discussion of rising escape of water claims is long running. The wider insurance industry is keen to work collaboratively and strategically to manage the spiralling cost. With damage management companies at the forefront of dealing with these types of losses and the aftermath for policyholders, their work has a huge impact on how the increasing costs can be managed.

Last month, Post Magazine in conjunction with Acumen, hosted a roundtable to discuss how insurers can work to seek solutions to these problems and the important role technology can play in controlling the increasing spend and helping reduce the impact of water damage. With Polygon being the UK’s leading water damage and leak detection experts and also a trusted partner of major insurance companies, two of its’ specialists - Richard Done, Major & Complex Claims Director, and Jamie Nash, Director of Leak Detection - share their perspectives on how damage management technology and efficiency can be the difference. 

What could be a contributing factor to rising escape of water claims? 

Lifestyle change is a significant contributing factor to the increase in frequency and indemnity spend on escape of water claims. We all have more water related devices in our homes today, from filtered water, to wet rooms and underfloor heating. These installations all have the possibility of failure. We also have to look closely at building construction; we have been called to numerous incidents where plumbing fittings have either failed or have been incorrectly fitted. This can be at the point of system testing or after a year where a pipe has been vibrating to the point of failure. Whilst we can do little to stop the developments of lifestyle, we can better manage the ways we educate policyholders and deal with claims.

Claim reporting

Technology holds significant options as to how we can handle escape of water claims. From the reporting of a loss, through to customer service and damage management solutions.

At Polygon, we have the ability to monitor water flow in properties, a system that learns policyholders’ water usage, lets them know if there’s a problem and then ultimately switches off the water supply. In regard to claims reporting, most people have mobile 

phones today. Asking them to report an issue within a set timeframe, not only to their insurer, but to the restorer could create prompt action to reduce the impact of a water loss.  

How can insurers ensure repair costs are kept to a minimum?

The flow through a supply chain is vital in reducing the cost of restoration and repair. What we see as a restorer are the breaks that happen, call it dead time, waste or failure demand. This break down in the supply chain model can all add to the cost of a claim. This process needs to be seamless in its delivery.  

We have a Claims Handling Philosophy that runs through every claim we deal with. Everybody in the team has a duty to move the claim forward at every touch point and ask the policyholder, ‘What is important to you?’. When a claim is assigned to Polygon the technician arrives ready to start work and with the mindset of keeping the policyholder in their homes and drying the property in the shortest and most efficient time.  

We can also assess the plumbing systems of properties, particularly in older or high-risk properties, which could help or remove the overall impact of a claim.  

Technology’s role in preventing and reducing escape of water claims costs

Polygon has a Smart Water Meter product to actively reduce the impact of escape of water claims. We have invested in this with a view of prevention, and not cure. We touched on this briefly above, but this product learns about policyholders’ water usage and alerts them to anything abnormal - which includes leaks and other variables such as a toilet constantly running. It fits under a standard UK sink and connects to an app. Policyholders will receive a push message from the app and a text message to inform them that there could be a problem. They can then decide if they want to switch the water off from anywhere in the world. 

As a minimum this product will reduce the impact - if not removing it completely. If we were to say 2% of homes in the UK suffer an escape of water, 100% need some level of protection. We do this with smoke detectors and intruder alarms, so why not water alarms? 

Meanwhile, Polygon’s approach to leak detection and water damage restoration supports insurers with reducing escape of water claims costs, as we utilise efficient equipment and technology with damage limitation in mind. We minimise disruption as much as possible to detect leaks and dry buildings often negating the need for hard strip-outs. 

Policyholder experience

The policyholder should be kept at the centre of the claim. All too often a group of industry experts are dealing with a person that has never been in this situation. We expect them to understand what everything means and what’s happening. They need reassurance and education throughout the claims process. Having somebody in control with the remit of dealing with the process end to end, is critical to the claims experience, which ultimately remains of the highest importance.

We use technology on every claim now, not only to transmit information for decision making to insurers, but internally as well. We’ve seen a reduction in complaints, and it has also helped with insurance fraud, for example claims exaggeration.  

How is technology at Polygon helping with insurance fraud?

We have long had a policy of reporting fraud, or suspected insurance fraud. For a restorer it’s more about the exaggeration of a claim. We have seen this picked up through video reporting and where it is noticed we do not hesitate to mention it to the policyholder. The use of video has also meant a change in mindset for the small number of people who are thinking of adding things to their claims.

A longer-term view will be the ability to use AI to identify fraud, but before that can happen as an industry, we need to build up a bank of images and videos that AI programmes can scan and flag cases that do not look right.    

Is there still a place for claims cash settlements? 

If cash settlements increase this will have a knock-on effect on the restoration industry, but of course there is a time and place for this method. What it means is that claims do not arrive with restoration companies which in turn affects their sales, profits and finally their ability to invest in the future of the industry.