Smart insurance claims prediction. To start, it will save you from burst geyser headaches!

Industry research shows that geysers only have an expected life-span of around seven years. Applying claims predictions technology to one of its most expensive line item is a smart move, in all respects.

"We want to improve on our customer experience, and save our clients' money by keeping cost down when it comes to building insurance. We believe preventative measures through smart technology is the way to do this," says Rowland Ramalingam, Head of Non-Motor Claims at Santam Insurance.

The short-term insurer has embarked on a business case study to gather data in order to do exactly that. The Smart Geyser pilot will be rolled out over the next couple of months and will see the smart device retroactively fitted to 2 000 customers' electric geyser.

Ramalingam explains it is then linked to their smartphone via an app and is able to detect and notify when water leaks into the drip tray or the geyser shows any signs it is about to burst.

"The device will automatically shut off the water and electricity to limit resulting damage. It will also send notifications to Santam, allowing the insurer to quickly process and resolve any resultant claims.

"Burst geysers can cause a lot of damage. Reducing risk through preventative measures is the future of insurance," says Ramalingam.

What are the benefits of the smart geysers?

"The main benefit of the smart technology means we prevent any potential incidents before they happen. Our customers can benefit by either having a potential incident completely averted or the resultant damage significantly reduced by early detection."

Homeowners will also be able to manage their geyser temperature and heating schedule via the smart application, adds Ramalingam.

"Our customers could save on electricity and ensure a lighter impact on the environment by using this technology."

The cost to install the smart device is about R1 200 to R2 500 depending on the service provider, he adds. In order to develop the smart insurance offering for homeowners, Santam will be absorbing this cost for the 2 000 geysers pilot and thereby be able to gather its business case data.

Beyond the pilot, it certainly does raise the question of who foots the cost.

"The reason why we are doing this pilot is to show as an example, if claims are reduced by R5 million, and this only cost R1million, as an insurer we've saved R4 million. It therefore makes sense to fit the devices. We need this level of data and detail to validate the investment," says Ramalingam.

Looking ahead, he believes the insurer could expand the smart technology to cold-storage devices.

"We don't have a lot of property-type risk prevention tech, but with time, we will start expanding in this field. I think the opportunity exists for young developers to say this a good market and to consider the huge potential that it has," says Ramalingam.