Restoration vs Replacement – How do They Stack up?

A recent report via the ABI (5th June 2018) stated that during the first quarter of 2018, insurance claims were up by 290% as insurers helped customers hit by The Beast from East and Storm Emma. We look at how the insurance industry could be saving millions of pounds every year by altering its approach to managing claims.

Impact of Weather Events

The insurance industry has faced a challenging start to the year. A total of £1.25 billion was paid by insurers under domestic and commercial property insurance policies, the highest quarterly figure for two years, and some 86,000 claims were handled, compared to 29,000 in the previous quarter (ABI)

However, what is interesting to note is that at this unprecedentedly busy time for the insurance industry, claim numbers for our Smart Repair solution did not follow the trend we would have expected.

Head of insurance at Polygon Smart Reapir explains,

“Insurers are still adopting old-fashioned, expensive and somewhat unreliable processes when it comes to their approach to handling claims, particularly during large-scale weather events.”

“Clauses within policy documents state that insurers have the option to repair, replace, or cash settle.  Many insurers do not understand just how many items are completely repairable, and during incredibly busy times, they revert straight to a replacement approach”.

In a recent report carried out for a leading insurer, Polygon Smart Reapir reported that in all of the cases that were presented to them, only 16% of the items were unrepairable.

Huge Savings with a Restoration-First Approach

Consumer Intelligence also recently reported that, due to the impact of these weather events, the average home insurance premium has increased by three times the rate of inflation at 7.6%.

Chris continues: “The way customers buy insurance has completely changed over the last decade due to the launch of comparison sites such as Compare the Market, etc. To remain competitive, insurers have to keep their claim costs low.

“We believe that the simplest way to do this, which has other benefits including reducing environmental impact, driving down the claim lifecycle and in turn increasing customer satisfaction, is to adopt a repair-first approach to insurance claims.” - Head of insurance at Polygon Smart Reapir.

In a recent report for a top 10 UK insurer, Polygon Smart Reapir estimated that they had saved them an average per claim of £850.  If insurers were to use Smart Reapir for 100 claims per month, they would enable a saving of £1,000,000 per year.